A Guide To Looking For Space (Ch. 1)

POSTED ON 09-22-2016 FOR PRIVATE SPACE BY NEAL LERNER

I want our readers to understand that in addition to providing information about fractional office space (shared law office space) available for sublease or license, we also function as Tenant Representative brokers for law firms and other professional firms who are looking for office space in New York City between 2,000 and 10,000 sq. ft.

If you are interested in hearing more about the services we provide for tenants - or if you would like a free, no obligation commercial office space survey, please call: 212 986 9100 and ask for Neal Lerner, our prime broker, or send us a message by Email.

We maintain an inventory that consists of every space available in commercial buildings throughout Manhattan from the tip of the island, Downtown, up to 59th Street. In fact, if you are looking for space we are happy to provide a full survey of available office space that includes:

  • Building address and basic characteristics
  • Space available in the size range of your requirement
  • Space description and characteristics
  • Floor plan (or proposed floor plan)
  • Our selection of what we think are the 5 best choices from the list, based on our interview with you
  • A comparative financial analysis of the spaces you have chosen from the list

At this point it is very useful to set up a calendar for the space acquisition process so that the tenant has a time line to follow.

  • You should allocate at least 4 weeks to review and inspect the available space in the submarkets that are appropriate to your search. If you start with the "Top 5" list that we provide, the space search time can be reduced - but we want to make sure that you are educated as far as current market conditions and values are concerned, and we believe that space inspection coupled with comparative analysis offers the best route to understanding the market. Once you understand the market you can make an informed decision on which spaces to choose from the solution set.
  • If your space has to be modified, you should allow at least 4 weeks for cosmetic changes and any approvals required to perform the work. You will likely need a basic architectural plan outlining the proposed changes and upgrades to the space.

    If you are building your space from a blank canvass you need a minimum of 14 weeks to get through the design and approval process, expedited permitting and space construction. To be comfortable you should allocate 1 Month to architectural design and review. 1 Month to permitting and approvals. Three months for construction - but sometimes the process can be fast tracked depending on the situation and existing conditions.
  • Don't forget the legal process. Lease negotiation as far as business terms are concerned is handled by LookingForSpace.com as your exclusive broker to represent your interests as a Tenant. It usually takes about 10 days to get a draft lease or sublease document prepared that reflects the transaction you are ready to agree to. But then, the lawyers get involved and the speed to conclusion is often reliant on the schedules of the attorneys on both sides. Usually, 2 weeks should be enough time to allocate to getting documents on the table that both sides agree to.

Once a Tenant has the basic information in the aggregate form, it is easier to get started with what can be a confusing and frustrating process - because as a Tenant looking for space in Manhattan, the odds are stacked against you because the system is not transparent or consistent from building to building, and neighborhood to neighborhood.,

The primary differentiating factor between spaces in New York City is the "Loss Factor" which is the key metric that determines the cost of the space "per rentable square foot". In NYC, Tenants pay for more space than they can actually lay carpet on. This is justified by the Landlords based on vertical penetrations to each floor and common areas that serve to deduct space from the floor that can be rented to a tenant. The ostensible purpose of the loss factor is to compensate the landlord for non-rentable space that to some degree provides a benefit for all tenants in the building. The object is to spread this "loss" equally, to every rentable square foot of space in the building.

The distinction is the ratio between "useable sq. ft." and "rentable sq. ft." The second is always larger as it is multiplied by a percentage which is the loss factor. The problem is this figure is not consistent. There is no hard and fast rule applied to all buildings, which would allow for a comparison of spaces by rentable sq. ft. because rentable square feet are not equal between buildings. Landlords set the Loss Factor in an arbitrary fashion as they please. When comparing buildings we see a "stated loss factor" vs the "actual loss factor" - and very often, depending on the level of professionalism of the landlord or the landlord's agent, the "stated" loss factor is a rough figure without any backup. It is much better to get this calculation directly from the Lanlord's architect, and in some cases you will have to engage your own architect to make these calculations accurately.

As Tenant Representative Brokers we like to compare spaces based on "cost per useable square foot". If you compare spaces on a "carpetable basis" (what you can actually walk on) then you have a common measurement method and are comparing apples to apples. If you let the comparison rely on "cost per rentable square foot", you will end up with misleading information because the spaces in different buildings are not measured with the same ruler - which unfortunately is when a foot is not a foot!

This is part of the job as a tenant representative that we take very seriously, because it is easy to be mislead by a stack of official looking spreadsheets. You must always be certain that the comparison is between spaces measured on an equal scale - and we'll make sure that happens for every space we show you that you are interested in.

A great benefit of working with LookingForSpace.com as your broker is that in addition to being confident you are getting our full attention and full level of services, that you can take a little extra future expansion space and rely on us to keep it subleased for you until you actually need it. A little expansion space will let you explore a longer lease term and lock in the great deal we negotiate for you, for a longer term.

.....To be continued

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