Penn Plaza vs Grand Central: Office Space Compared

The $29 gap and what creates it

Grand Central asks $81 per square foot per year at the median across the floors we hold, Penn Plaza asks $52, and the difference is close to $29 on every rentable foot. Flip it and the east side is 55% more expensive, the same fact in different clothes. Our eastern median is precisely $80.50, the midpoint of a $72 floor and an $89 floor. On a 5,500 square foot floor the spread is $156,750 a year, or $13,063 a month.

Against the $75 citywide median across our book, Penn Plaza's median runs $23 under and Grand Central about $6 over: the value side of the market against the premium side. That median hides a split, because 2 Penn Plaza asks $135, the dearest floor on our whole book, and it is only the loft floors on West 35th Street that are cheap. Building stock explains most of it, garment-era loft on the side streets between West 34th and 36th against prewar boutique buildings and the tower wave One Vanderbilt started, plus a tenant base skewed to law, finance and consulting.

Before you treat $30 as settled, remember those are asking rents. Your budget answers to the effective rent after free rent, improvement allowance and escalations. We model both sides net effective before anyone signs, and the spread narrows by a few dollars. It rarely closes.

What we hold in each

Penn Plaza is 3 floors in two buildings. Two are stacked at 213 West 35th Street, 5,250 square feet at $50 and 6,100 at $52; the third is a partial 17th floor at 2 Penn Plaza, 5,070 square feet at $135. At roughly 175 square feet per person that is 29 to 35 desks each, and a team needing 11,350 square feet can take the West 35th Street pair and seat about 65.

The Grand Central pair sits in two separate buildings with no way to combine them, a partial 13th floor of 5,772 square feet at $72 at 60 East 42nd Street and a partial 29th of 5,230 square feet at $89 at 825 Third Avenue. Call it 30 to 33 desks on either.

Set the closest two side by side. That 5,250 feet at $50 runs about $21,875 a month, while 5,230 feet at $89, twenty feet smaller, runs about $38,789, a difference of $202,970 a year between floors that seat the same company.

A team of about 30 can go either way. Thirty-five people fit only the 6,100 at Penn Plaza, and 40 to 65 have one route on this page, the stacked pair on West 35th Street. Under 25, neither serves you from today's book and we widen into the neighboring submarkets. Compare finalists on a test fit rather than rentable square footage, since loss factor differs building to building.

Getting there, and getting your people there

Trains decide this more often than buildings do. Penn Plaza runs on 1/2/3, A/C/E, LIRR and NJ Transit, Grand Central on 4/5/6, 7, S and Metro-North, and a train that terminates where you work beats one that hands your staff a transfer twice a day.

New Jersey and Long Island arrive at Penn, Westchester and Connecticut at Grand Central, inside forty minutes on Metro-North across much of that catchment. If the people you most want to keep ride one of those systems, your address either saves them forty minutes a day or costs them forty, and twenty minutes each way is over three hours a week per person. Hiring bends the same way.

Our recommendation, by tenant type

We represent tenants only, so nothing here steers you toward the higher rent. Our positions:

• Take Penn Plaza if payroll lives in New Jersey or on Long Island, headcount sits between 30 and 35, and $202,970 a year would do more work as hiring or buildout than as an address.
• Stay west as well if you expect to outgrow one floor inside the term, because the stacked pair on West 35th Street is the only route here to roughly 11,350 contiguous square feet.
• Pay for Grand Central when the founders or the people you cannot replace ride Metro-North. Spending $89 per foot on 5,230 square feet is defensible when the alternative costs your two most senior hires forty minutes a day.
• The eastern premium also earns itself when your clients are East Midtown professional services and meetings happen in person. An address does real work in some sales cycles and none at all in others.
• Choose Penn Plaza outright if nobody outside the company will ever visit the office, and choose it on West 35th Street rather than at 2 Penn Plaza, where $135 buys the address you just said you do not need. Value wins that argument every time.

How to settle this in one afternoon

All five floors are ours to show, and one afternoon covers both districts: 213 West 35th Street for the 10th and 11th, 2 Penn Plaza for the 17th, then 60 East 42nd Street, then 825 Third Avenue. Most clients know which side of town they belong on before the last stop.

Bring your team's home zip codes and a headcount plan for the end of the term, not the start. We will test fit your two finalists and price both net effective. Work backward from your move date, because design, landlord approval, DOB filing and construction sit between a signed lease and an occupancy date.