SoHo vs Penn Plaza: Office Space Compared

The $46 gap and what genuinely drives it

SoHo's nine floors carry a median ask of $98 per square foot per year and run individually from $68 to $125. Penn Plaza's two ask $50 and $52, a median of $51. The gap is $46 a foot, about 88%, and against the $75 citywide median across our book that puts SoHo 31% above the middle and Penn Plaza roughly 31% below. On 5,250 square feet the difference is $241,500 a year, $20,125 a month, $1,207,500 over a five-year term before escalations.

Scarcity drives most of it. SoHo's product is landmarked nineteenth-century loft in the cast-iron district and the supply cannot grow, so the address carries a premium unrelated to the floor plate you rent. The Penn Plaza stock is garment-era loft off West 34th to 36th, priced below comparable space ten blocks in any direction because the district is still mid-rebuild. SoHo's $57 spread is wider than the whole Penn Plaza market, so the floor matters far more than the name.

What we hold in each, and which teams they can house

Our SoHo book runs seven floors from 3,750 to 27,344 square feet, roughly 21 to 156 desks at the 175 square feet per person we plan against. Penn Plaza is two floors, 5,250 and 6,100 square feet, 30 to 35 desks, both at 213 West 35th Street and stacked on the tenth and eleventh.

That asymmetry settles more searches than rent does. A thirty-person company has a genuine choice; a twelve-person company does not, since nothing in Penn Plaza goes below 5,250 feet. Above thirty-five desks it runs out unless the landlord leases both floors together, about 11,350 square feet and near 65 desks, worth asking before writing Penn Plaza off.

• SoHo's cheapest floor is now One Soho Square at $68, sixteen dollars above Penn Plaza's top ask, and at 27,344 square feet that cheap door only opens to a company needing about 156 desks.

Getting there, and getting your next twenty hires there

SoHo is served by the N/Q/R/W, 6, A/C/E and B/D/F/M. Penn Plaza has the 1/2/3, A/C/E, LIRR and NJ Transit. The decisive difference sits at the end of that second list: one of these is a commuter rail address and the other is not.

Staff coming in from Long Island, New Jersey or the northern suburbs reach Penn Plaza with a train and a walk rather than a train and a transfer, and you feel it in attendance and in what candidates say. Where your people already live in the city that advantage collapses, and SoHo's four line groups plus the neighborhood do recruiting work Penn Plaza must do on compensation.

Our recommendation, by tenant type

We will take a position rather than split the difference. Where clients come to you, where the product is design or consumer or fashion, and where the office is part of how the company is seen, take SoHo and pay the $46.

Operations, sales and back-office teams that nobody visits and that hire from the commuter belt should take Penn Plaza without agonizing. $51 a foot with LIRR and NJ Transit at the door is the best access-per-dollar trade in our book.

The harder case is the company that could honestly justify either. At 5,250 square feet the premium is $241,500 a year, a senior hire fully loaded in most of our clients' budgets, so it belongs only where the address returns more than that hire would. Often it does, and where the binding constraint is recruiting rather than cash we say pay it knowingly.

The tenant who should not pay it calls itself brand-led, has no client traffic and hires from the suburbs. Beyond thirty-five desks at Penn Plaza economics our book cannot help, so widen toward Chelsea, Hudson Yards or Midtown.

See both in one afternoon

These two share the A/C/E, so the comparison takes an afternoon rather than a week. We hold seven floors in SoHo and two in Penn Plaza, so one day covers the whole Penn Plaza market plus four or five SoHo floors.

Tour Penn Plaza first, because it sets your price floor and makes every SoHo number concrete. Bring the questions a spreadsheet cannot answer: ceiling height and column spacing on the actual floor, what the landmark designation means for your buildout, and how DOB filing lines up against your move date.

Whatever survives goes into a test fit and gets priced properly, since asking rent opens a negotiation and taking rent closes it. Loss factor, escalations, electric and cleaning, the improvement allowance, free rent, the letter of credit and the good guy guarantee decide the rest. Send us your headcount and move date.