Office space lease rates in NYC fluctuate significantly based on various factors. Lease prices currently span from economical mid-$30s per square foot in the Garment District to premium rates that can be well over $100 per square foot in Midtown East. Such variations are attributed to several key factors: the office's location, the building's classification—Class A, B, or C—and the inherent quality of the individual office.
The area surrounding Grand Central Terminal benefits from the ease of commuting, including from Westchester and Connecticut, and now, with the recent opening of the Long Island Rail Road extension, Long Island as well. The Grand Central hub is without comparison in NYC, and as a result, landlords with offices for lease here have greatly benefited. By contrast, at the southern tip of Manhattan, offices in the Financial District lease at lower rates, as the area is less accessible for many office workers. However, companies prioritizing lower office rent over location factors may find that the Financial District offers many suitable options, especially for those companies with southern Brooklyn and Staten Island employees.
Every submarket in NYC has a variety of office buildings that differ significantly in quality. For example, the Garment District is home to a high density of Class C buildings but also has a few Class A office buildings like One Penn Plaza and Nelson Tower. It's safe to say that the best office buildings can be found on the avenues, while lesser buildings tend to be on the side streets. These side street buildings are often older and lack many features tenants desire.
One inherent difference between Avenue buildings and Side-street buildings -- and a reason why the offices within them are more desirable -- is that Avenue buildings occupy the corner of the blocks. As a result, these buildings will have many more corner offices for lease. Everyone prefers an office with windows on at least 2 sides; the more light, the better. It would be unusual for a tenant to request a dark office with very little natural light. So, if it's quality and natural light that you're after, you should prioritize Avenue office buildings located on the corners.
Other things to consider are the general qualities of the building. What's the lobby like? Does it have professional and courteous staff? When was the lobby last renovated? Does it give a good first impression? Are there a sufficient number of elevators? What are the elevator cabs like? How are the corridors and bathrooms? The list goes on.
Quality office space
While the quality of the building is vital in understanding rates for office space in NYC, the quality of the individual office space for lease is also essential. There isn't a category system to grade the quality of individual offices -- like there is for buildings -- but here are a few things that will affect the price of an office.
First and foremost, the office's location within the building plays a role in the value of the office space. Typically, a high floor is worth more than a low floor; a street-facing office is worth more than a rear-facing office; a corner unit is worth more than a unit with only one side of windows; an office located close to the elevators might be worth more than one that is a further walk; and a new prebuilt office space will be worth more than a second generation office space.