4 *Notable* Things We Saw in 2022
2022 was a year to remember, full of moments that put the POP in pop culture – the Queen’s death, the Tom Brady and Gisele divorce, the Taylor Swift Midnights and Ticketmaster debacle and when Tom Cruise returned to the big screen back and better than ever.
We know real estate is also a spectator sport, so we’re sharing a highlight reel of 4 notable things we saw in 2022, and why they matter to you going into 2023.
Short term subleases are flying off the shelves with a sweet spot of 2-3 years
We recently had 3 subleases signed in 1 week. That’s never happened before, so why now? Short subleases are the best of all worlds: flexibility amid uncertainty around hybrid and bringing people back to the office, deeply discounted price, a furnished, wired and ready to go space and a high chance you’ll find the exact design and layout you need (without having to pay for it). We’re seeing a ‘sweet spot’ term of 2-3 years, but you can go longer or go as low as 1 year. Here’s an article we wrote on what to know about short term space options.
High growth startups and VCs are keeping the office space market afloat (from coworking to triple digit rents in brand new buildings)
High growth companies are taking more space in this market than ever before, from coworking and short term subleases all the way through brand new buildings with triple digit rents. Here are a few examples:
Our client Melio was the first tenant in the brand new Zero Irving in Union Square; since then, the building only has 2 floors left with fintechs and other tenants taking space like crazy and driving rents in some cases to $60 per square foot more than what our client paid last year.
Another client Fin VC took space at the newly unveiled 10 Grand Central – beautiful views and light, snazzy tenant amenities (including a…drum roll please…tenant-only Porsche car) and the right office experience for employees, investors and prospective portfolio companies.
Many coworking spaces are 95% full (especially the favored locations); we’ve helped 10+ seed and Series A startups take coworking space for less than a year in the last few months, and despite the fact that its only coworking there are a few key ‘gotchas’ we look out for
Landlords are (finally) realizing they need to DO something about empty space
It’s not a good time to be a B+ or lower space in NYC. Landlords in these buildings are finally realizing they need to take action, or their spaces will continue gathering dust (and *shudder* other unwelcome creatures). Some landlords are spending hundreds of millions of dollars revamping their spaces and adding tenant amenities, some like the famous McGraw Hill building are converting to residential and other mixed uses, and some are….well…waiting for you to name your price. Here’s an article we wrote on the transformation of the office space in NYC.
Brand name companies are backing out of big expansion plans
KKR is the latest in a long list of household names to back out of their Manhattan expansion. The more provocative headlines will have you believe they, along with Facebook and other big names, are dumping their office space altogether, but for the most part that’s not true. But between remote work and the anticipated recession, they are dumping their expansion plans, leaving some pretty unhappy landlords in their wake.
Takeaway
Whichever space story above sticks with you the most, the universal truth that ties all tenants together in this market is this: you have more leverage than ever. You just need to know how to use it (and for that, you need a broker you can trust who doesn’t have the landlord on speed dial). As the only brokerage in NYC that represents tenants only (and never landlords), we’re happy to walk you through your space options with full transparency.
Please reach out to me at brosenblatt@vicuspartners.com or call my cell (917) 862-8820 if you'd like to discuss your space options in this market and how we can help.
