What Are Your Space Options in a Covid Market?
Your Office Space Options and Solutions No Matter Your Company’s Size
COVID-19 is still affecting office life. The good news, however, is it’s still a tenant’s market when it comes to office space decisions — and you have options no matter the size of your company or what is best for your company’s long-term success.
Below are some scenarios you may be in with tactical solutions that may help you and your business:
You have space that no longer works for you
Buy out of your existing lease: if you’ve held onto your space during the pandemic but now realize it’s the wrong space for your new needs, we can negotiate a lease buyout with your landlord. We’ve successfully negotiated several of these over the last 18 months to benefit both parties. *we typically know quickly after engaging with your landlord whether they are open to a buyout, and the mechanics of it are fairly simple.
Sublease your space: there are 20 million feet of sublease space on the market, so you’re far from alone in this decision. The pros: if you have a built, high-quality space and are willing to offer a discount to the market, chances are we’ll be successful. There’s been a “flight to quality” in recent months — meaning a feeding frenzy on suitable sublease spaces — as more companies return (or plan for a return) to the office and seize on the value of steeply discounted sublease.
You need space to fit new needs — but what’s out there?
Coworking space = short term + low commitment: Many brokers won’t present coworking options because bigger space + longer term = bigger commission. But it’s a real and often helpful short-term option to “bridge” your decision on permanent and space while giving employees the experience of a desk, good energy, and even *gasp* that old relic known as an office phone. These agreements are typically between 3 and 12 months and give you flexibility on changing plans without committing to a long-term lease.
Steeply discounted sublease space: there’s been a “flight to quality” in recent months — meaning a feeding frenzy on suitable sublease spaces — as more companies return (or plan for a return) to the office and seize on the value of steeply discounted subleases with beautiful (and sometimes brand new) buildouts that come furnished, wired and ready to go. But even a feeding frenzy has barely put a dent in the 20 million square feet of sublease space available in NYC; there are plenty more for the taking.
Direct space: the NYC market has close to a 20% vacancy rate (close to 100 million square feet of available space). Direct space is the right option if you’re looking for brand new construction with coveted outdoor space, an already built space to easily bring your employees back to an office experience, or a white box space to build out to your design and specifications. With high vacancy and divergent opinions on office space, it’s still a tenant’s market in a big way — and landlords know it. We’re still seeing more concessions and more room to negotiate than we’ve seen in decades; for landlords, making a less favorable deal is better than disappearing into the black hole of vacant space.
You want to keep your space (bet renegotiate terms to start saving now)
Blend and Extend: this is fancy real estate speak for: extend your current lease beyond your existing lease expiration and receive immediate free rent upfront and better base rent. Landlords are willing to give for longevity because they won’t want their spaces to be part of the massive vacancy rates. (*note: these blend and extend negotiations can involve conversations about back rent owed if you’re in arrears).
Contact us:
If you have any questions or want to talk through your specific scenario, please reach out to our founder, Bert Rosenblatt at brosenblatt@vicuspartners.com, or at (917) 862-8820.