Architecture Firm Subleases Office Space in Midtown

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. 

There are many benefits to renting a shared office space. For one, it's a cost-effective way for companies to enter the NYC office market without too much hassle. The rental agreements are less complicated than direct lease agreements that can stretch 60 or 70 pages. And security deposits are more manageable; typically, sublandlords only hold a couple of months.  

Maybe a shared office sublet would be suitable for your company. Here are a few ideas. Click the title to see the complete listing.

• Garment District Office Sublet: An engineering firm in the Garment District has a semi-private office space for sublease. The suite has two distinct areas separated by a conference room, which gives both companies privacy. The area for sublease even has its own entrance. This shared sublet would be ideal for a company with 8-10 employees. The layout includes 2 private offices, 6-8 desks in the bullpen area, and access to a kitchenette and conference room. 
• Penn Station Office Sublet - A construction company on Seventh Avenue near Penn Station has a newly built, modern office space for rent. The available office space includes 2 offices and 4 workstations. The subtenant will have access to a conference room, kitchen, and pool table. A tenant amenities center in the building has additional conference rooms, a lounge area, and a kitchen. The space could be a great fit for an architect or engineering firm.
• Midtown South Office Sublet - An architecture firm has a private office for sublease within their suite on East 33rd Street. This sublet would be perfect for 1-2 people searching for a quiet workspace. The suite has a modern kitchenette and a seating area. The lobby was recently renovated and has security. This office sublet would be ideal for a small company looking for an alternative to a flexible workspace provider, which is likely the only other option in this size range. 
• Chelsea Office Sublet - An engineering firm has office space for sublease within their suite on West 29th Street, a few blocks south of Penn Station and a short walk to Manhattan West and Hudson Yards. The building's owner constructed the office space for the engineering firm a couple of years ago, and it still feels brand new. The firm is subleasing 1 private office and up to 4 workstations in the bullpen. The subtenant will have access to the conference room, kitchen, and a private bathroom within the suite.

Renting shared office spaces like these offers tenants an alternative to traditional office leases and flexible workspace providers. If a company is looking for office space with a lease term shorter than 3 years, finding a traditional office will be challenging—especially for very small units or ones that need some work. But if you happen to find one, chances are the quality might not be up to snuff. This is why many companies searching for office space with a relatively short term (i.e., 12 months) opt for a turnkey office suite in a flexible office space company. While the monthly office rent will be a little more than traditional offices or shared sublets, flexible workspace companies offer move-in-ready offices and, as the name suggests, flexible lease terms. 

LAW FIRMS: SHARED OFFICES WITH ATTORNEYS

It's more or less standard practice for attorneys to sublease office space to other attorneys. Most of the time, language is included in the master lease stating that the landlord's written consent is not even required, as is the norm with most subleases. However, compatibility is still a concern. Attorneys usually prefer to have a variety of law practices within one suite because one of the fringe benefits of sharing office space is being able to refer business back and forth, and this works better when the firms have different areas of focus. 

One of the main compatibility objections we hear is regarding foot traffic. Some personal injury and immigration practices receive a lot of visitors, and the waiting area might start to feel more like a doctor's office. That's not always a good fit for a buttoned-up corporate firm. 

Here are a few shared law firm sublets: 

• Midtown East Law Office Sublet - A law firm on East 58th Street has 1 furnished office for sublease. The office is on a high floor with good natural light and views. There is access to a conference room, a kitchen, and a reception area. This office would be an ideal commute for an executive who lives on the Upper East Side. 
• Nomad Law Office Sublet - This law firm, located a stone's throw from the new Virgin Hotel in Nomad, has 4 offices and 3 large cubicles for sublease within their suite. The subtenant will have access to 3 conference rooms, a kitchen, and a reception area. There aren't many law firms in Nomad, so it's an excellent opportunity for an attorney who wants to be in the heart of this vibrant neighborhood. 
• Herald Square Law Office Sublet - A law firm on Broadway at 36th Street has 2 offices and 2 workstations for sublease. There is a conference room, a kitchen, and a reception area. The building is convenient to Penn Station and the PATH train and is only a 10-15 walk to Grand Central Terminal. 

CONCLUSION: IT'S A WIN-WIN SITUATION

Sharing office space with another company is a win-win. The sublandlord offsets their monthly office rent, which helps the bottom line, and the subtenant receives a move-in-ready office with minimal startup costs. In fact, this was the exact outcome for the architecture and financial services firm. 

Get in touch to learn how we can help your company offset your monthly rent or find an office share opportunity.