An architecture firm that has operated in the city for decades contacted us to assist with their office space search in NYC. The firm had been working remotely since the pandemic began but decided to shift away from remote work and rent an office in Manhattan again, where most of their projects are based. Initially, we explored the possibility of renting a private office suite of their own, and we evaluated various options. But in the end, a shared office sublet with a financial services firm best suited their needs.
Several factors influenced the decision. First, the sublet is in a Class-A building in Midtown—the most desirable of office buildings in NYC. If the architecture firm were to rent its own private suite in a Class-A building, it likely would have to sign a 5-year term. And it's challenging to find small offices in Class-A buildings, as most available offices for rent start at much larger square footage. So, they found that they could get a better space by subleasing in a shared suite—in a Class-A building—than they otherwise would have been able to.
Second, the shared office in Midtown was fully furnished. Finding a fully furnished office is significant for 2 reasons: time and money. New office furniture is pricey. To fully furnish an office, we estimate spending between $15-20 per rentable square foot for standard furniture—nothing too fancy. For example, you'll spend between $30,000 and $40,000 to furnish a 2,000-square-foot office in NYC. Therefore, the architects saved a substantial amount of money by finding an office that was already equipped. What about time? Well, there is often significant lead time on furniture delivery. Once you purchase it, it usually takes at least 6-8 weeks to receive it. You might be lucky enough to find furniture in stock or some ready to ship immediately, in which case you'll receive it quicker. But the more furniture you require, the less likely it'll be in stock. If you need 5-6 desks, you have a shot, but if you need 50-60, it's less likely.
Third, the sublet was ready for immediate occupancy. The architects could move in immediately without waiting for another tenant to vacate the space or for time-consuming construction work to be completed. They signed the agreement one week and were working in the office the next.
As for the financial services firm, they were not using all of their office space and saw an opportunity to offset their rent by taking on a subtenant. In addition to the extra funds, the firm's principal wanted to create a more lively office atmosphere. It had become too quiet and library-like, and he felt that having more people in the office would help keep employees engaged.
SHARED OFFICE SPACE IN NYC
Shared subleases in New York City can be a challenge to find. A number of factors must align for the office to be a good fit for both parties. But some of the factors will apply to any type of office lease, not just shared sublets:
Location: The location must be within the company's desired area. In Manhattan, we usually focus on street boundaries. If a company says they want to rent office space in Midtown, we try to narrow it down. They might only consider offices between 46th to 57th Streets and Fifth to Park Avenues.
Price: The price must be within a specified budget. Some companies focus on a specific price per square foot. For example, they might say they want to stay below $70 per square foot. But it's better to focus on the monthly or annual rent amount, seeing as offices in NYC are measured with a "rubber ruler" (read: loss factor in NYC). The price per square foot is an inaccurate gauge because the real office square footage is never represented, and the loss factors vary from building to building. However, the price per square foot can indicate the quality of the building, so keep it in mind as a reference.
Term: The lease term must fit the company's needs. Unlike residential leases, where nearly every lease is 1 year, the lease terms are longer for commercial office leases. Most landlords require a 3- to 5-year lease, depending on the work needed to modernize the space and make it suitable for a new tenant—generally, the more work required, the longer the lease term.
But, there are additional factors to consider when subleasing office space in NYC:
Compatibility: The two companies (sublandlord and subtenant) must be compatible. Like roommates or couples, many factors can affect compatibility. For example, a law firm that receives substantial foot traffic from clients might not be a good fit with a company that would consider it disruptive. Or, a noisy company, like a sales team that operates at a high volume, typically isn't compatible with a company that needs a quiet atmosphere to work efficiently.
Layout: Only in rare circumstances would a sublandlord do construction work and change the office space layout for a subtenant. It almost never happens when a company signs a short-term lease agreement—which most shared subleases are. This is to say, the existing layout of the office space must align with what the subtenant needs. If a company has 2 offices for sublease within their suite, but your company needs 2 offices and 3 workstations, it's simply not going to work. Similarly, if a company is looking to rent 2 offices, and there are a total of 6 offices for sublease in the suite, the sublandlord might stipulate that all 6 offices must be leased together as a package. Finding a sublease with a suitable layout is the most challenging part of locating a sublease in NYC, or anywhere for that matter.
CLASS-A OFFICE BUILDING IN MIDTOWN
Architects tend to have discerning tastes, so it's no surprise they jumped at the opportunity to sublease an office in a Class-A building. This Midtown office tower is 40 stories and has a fully renovated lobby with vaulted ceilings, professional security, and modern turnstiles with keycard access. The building has a new "destination dispatch" elevator system that optimizes elevator trips by grouping passengers with a similar destination into the same elevator, increasing efficiency and decreasing wait times.
Another building perk is the tenant amenities center. The building offers tenants access to 2 conference rooms, a kitchen with bar seating, two lounge areas, phone booths, and even a tabletop shuffleboard game. It's the perfect place to take a private call, have an informal meeting, or just take a break. Tenants can also reserve the amenities center for private events.
The building has a bike room accessible through the freight entrance. This was an important detail because several of the employees cycle to work and need a secure place to store their bikes while in the office. And if it's 90 degrees and you arrive sweaty to work, don't worry because there is also a shower.