NoMad vs Penn Plaza: Office Space Compared

The ten dollars, and what it actually buys

Our NoMad median is $62 per square foot per year against $52 in Penn Plaza, a $10 gap, about 19%. On a 6,000 square foot floor that is $60,000 a year, about $300,000 over a five year term before escalations. Both sit under the $75 citywide median across our book, NoMad by $13 and Penn Plaza by $23.

The gap misleads, though, because the medians come from floors that barely overlap in size. NoMad's four ask $57, $62, $62 and $90, Penn Plaza's three $50 and $52 from one address and $135 at 2 Penn Plaza. Price the comparable pair, 6,000 square feet at 22 West 27th Street at $57 against 6,100 at 213 West 35th Street at $52, and the rent is $342,000 a year versus $317,200, a difference of $24,800, under 8% rather than 19%.

What the premium buys is the block rather than the building: growth-stage offices clustered around Madison Square Park, against garment-era loft stock in a district still mid-rebuild. Depth decides how much of the ask comes back, and NoMad gives you four buildings to play against one another where Penn Plaza gives two.

What we hold in each, and who fits

Four NoMad floors across four buildings, 5,621 to 12,500 square feet, roughly 32 to 71 desks at the 175 square feet per person we plan to. Three Penn Plaza floors, two at 213 West 35th Street and one at 2 Penn Plaza, 5,070 to 6,100 square feet, 29 to 35 desks. Set out as bands, the comparison answers most of itself.

• Under 29 people: neither, today. The smallest floor on either book is 5,070 square feet.
• 29 to 35: the one band where both submarkets want the same tenant.
• 36 to 54: NoMad, at 9,500 square feet.
• 55 to 71: NoMad, at 12,500 square feet.
• Above 71: neither, and the search widens toward Flatiron, Chelsea or Midtown.

Two of the three Penn Plaza floors sit in one building, the 10th and 11th, so a team near sixty-four can ask whether they come together, about 11,350 square feet, though that is the owner's call. Lease one and a thin market gets thinner.

Getting there, and getting people to keep doing it

NoMad's service is N/R/W, 6, F/M at 23rd and 28th. Penn Plaza's is 1/2/3, A/C/E, LIRR, NJ Transit. Not one line reaches both, unusual for two markets eight blocks apart, so the two addresses serve different rosters.

Ten minutes on the N/R/W or the 6 puts a NoMad tenant at Grand Central or Union Square, which serves people already living in the boroughs. Penn Plaza is a regional rail market, where LIRR and NJ Transit at Penn Station and the rebuilt Moynihan Train Hall collapse a two-leg commute into one. It is the second leg, the transfer and the wait on a platform, that turns a tolerable commute into a resignation eighteen months later.

Read your roster before you read the rent. If a real share of your people, current or expected, boards a train outside the city, Penn Plaza pays out every working day of the lease; if nobody does, you are buying an unused amenity.

Our recommendation, by tenant type

Teams of thirty to thirty-five whose workforce commutes by rail: Penn Plaza, and stop deliberating. The sizes fit, the rent is lower, and 5,250 square feet at $50 runs about $21,875 a month against $28,500 for the 6,000 square foot NoMad floor.

A team of the same size hiring against other venture-backed companies: pay for NoMad, at 22 West 27th Street for $57. The premium over the comparable Penn Plaza floor is about $2,070 a month, less than a quarter of one mid-level salary, and it puts you inside the talent pool your candidates already shop in. That is the number founders talk themselves out of in spring and regret by the winter hiring push.

Thirty-six desks and up: NoMad, because Penn Plaza holds nothing that size today and preference does not change arithmetic.

Below twenty-nine: neither fits cleanly, and we would rather say so than sell you a floor. Treat the 5,070 square feet as space to grow into.

How to settle this in one afternoon

West 27th Street to West 35th Street is eight blocks and we hold floors at both ends: three in Penn Plaza, the 10th and 11th at 213 West 35th Street and the partial 17th at 2 Penn Plaza, and four in NoMad with three of those within two blocks of each other. Seven floors in one afternoon.

Bring your real headcount and ask for a test fit before anyone trades rent numbers, because thirty-four desks on a plan and thirty-four desks people can work at are different products at one price, and the loss factor behind the rentable footage is where the difference hides. Then compare deals rather than asks: electric, cleaning, escalation, the letter of credit, a good guy guarantee, improvement allowance and free rent.

Floors quoted $10 apart have finished within a few dollars once all of that is priced. If you are building out, sequence design, DOB filing and construction before you promise a move-in date. We represent tenants only, and can put the tour together this week.