Midtown vs Penn Plaza: Office Space Compared

The seventy-three dollars, and what drives it

Midtown's median ask is $79 per square foot per year and Penn Plaza's is $52, a gap of $27 a foot and roughly 52%. On the 6,100 square foot 11th at 213 West 35th Street that is $164,700 a year, about $823,500 across a five year term before escalations. Against the $75 citywide median across our book the pair no longer lands symmetrically, Midtown about 5% above and Penn Plaza about 31% below.

The premium buys the deepest supply of large, efficient full floors in the city, plus an address that does quiet work for a business whose clients visit. Penn Plaza is mostly garment-era loft stock on the side streets by the station, leasing well under what comparable space costs ten blocks in any direction, with one tower floor at 2 Penn Plaza that does not follow the pattern.

The rent ranges used to sit clear of each other and no longer do. Our cheapest Midtown floor, 1700 Broadway, asks $79, still $27 above the 11th floor at 213 West 35th Street, but 2 Penn Plaza asks $135 and tops everything we hold in Midtown, so Penn Plaza brackets that market rather than sitting under it. Midtown's own spread of $79 to $130 is narrower than the $73 gap between the medians, so the choice of submarket now carries more money than the choice of floor. These are asking rents; taking rent lands lower once free rent and improvement money are priced in.

What we hold in each, and who fits

Four Midtown floors in four buildings, 7,092 to 19,097 square feet, roughly 41 to 109 desks at the 175 square feet per person we plan to. Three Penn Plaza floors across two buildings, the 10th and the 11th at 213 West 35th Street at 5,250 and 6,100 square feet and a partial 17th at 2 Penn Plaza at 5,070, so 29 to 35 desks. Those size bands still do not overlap, which ends most versions of this comparison before rent enters it.

• 30 to 35 people: Penn Plaza, since Midtown holds nothing under 7,092 square feet.
• 36 to 40: awkward. Take the 7,092 at 520 Madison Avenue and grow into it, or ask about both Penn Plaza floors together, about 11,350 square feet.
• 41 to 109: Midtown, since Penn Plaza holds nothing that size.
• Under 29 or above 109: neither, and the search widens.

Penn Plaza is thin where it is cheap: two of its three floors sit in one building, so if one leases, the value choice halves. Midtown's four answer to four landlords, and owners who know they are being compared negotiate differently.

Getting there, and getting people there

In Midtown the service is nearly every line, with Grand Central and Penn within reach. Penn Plaza's is 1/2/3, A/C/E, LIRR and NJ Transit, at the door of the station and the rebuilt Moynihan Train Hall. One market gives you breadth, the other depth on a single axis.

Read that against your roster rather than a map. A staff drawn from all five boroughs reaches Midtown from anywhere without anybody drawing the short straw, which keeps it the neutral answer for a company hiring across the city. A workforce weighted toward Long Island or New Jersey gets what Midtown cannot match at the same rent: the train arrives where the office is, and the second leg, the part people actually resent, disappears. The commute is the one condition of employment a candidate prices before meeting a colleague.

Our recommendation, by tenant type

At 30 to 35 desks, take Penn Plaza and stop deliberating. Midtown offers nothing that size on our book, and the nearest thing to it, 7,092 square feet at 520 Madison Avenue, runs about $886,500 a year at $125 against $317,200 for the 6,100 at $52. Nearly triple, for space you did not ask for.

Above 40 desks it is Midtown by default rather than by preference, since Penn Plaza has nothing in that range today.

Paying up has a better case than the median suggests, and it belongs to tenants whose clients visit and tenants recruiting against firms already on Madison and Broadway. Shop the bottom of Midtown instead of skipping the market: the entire 26th at 1700 Broadway asks $79, four dollars over the citywide median, which prices a Midtown address $27 a foot over the 11th floor at 213 West 35th Street rather than $73. That 52% premium is money we would spend.

One honest limit: a 30 person team that wants Midtown cannot have it from us at that size, and we would rather say so than talk anyone into 7,092 square feet.

Settling this in one afternoon

Ten blocks separate 213 West 35th Street from 45 West 45th Street, and we hold floors at both ends of that walk. Penn Plaza is one stop covering two floors; Midtown's four buildings take the longer half of the afternoon.

Bring your real headcount, ask for a test fit before anyone trades rent numbers, and use the walk-through for what a listing sheet never tells you: column spacing, the light, whether the plate takes your plan or fights it. Then compare deals rather than asks, on loss factor behind the rentable footage, electric, cleaning, escalation, the letter of credit, a good guy guarantee, improvement allowance and free rent. If you are building out, leave room for design, DOB filing and construction before promising a move-in date. We represent tenants only, and we can assemble the tour this week.