Financial Analysis Firm Leases Office Space Near Bryant Park

A financial analysis firm signed a 3-year office lease in Midtown near Bryant Park. After touring a number of offices—including office sublets and flexible workspace providers—the firm decided the best fit was a small direct lease in a renovated office building on 40th Street that caters to companies moving from WeWork and other flexible providers. 

Time was of the essence; the firm needed to take possession of the office space quickly, therefore finding a move-in-ready office was high on the list. The layout has one private office and an open workspace suitable for 5-6 desks. And everything was brand new: new lighting, new floors, new tenant-controlled AC. 

Finding a small, high-quality, prebuilt office space in NYC can be challenging. Keep in mind that we're talking about 3 different things: size, quality, and a built office. A large, high-quality space wouldn't have worked; a small raw space (i.e., not built) wouldn't have worked; a small grungy space wouldn't have worked. And this doesn't take into consideration budget, location, or layout. This is to say, a lot of factors must align for an office to be acceptable to a tenant.

The reason there are not more small, high-quality, built offices is simply because most landlords do not prioritize small office spaces—they're focused on renting the larger offices within their portfolio, the ones with higher returns. And landlords often combine small offices with larger ones, which reduces the inventory of small offices. If you were to tour all the small offices in Midtown—say, under 1,200 square feet—you'd be hard-pressed to find higher quality offices than the ones in this building. 

Why This Building Stood Out

The building caught the firm's attention because it offers private modern offices and an exclusive tenant amenities floor. These are the types of amenities that companies renting office space in a flexible workspace provider have come to expect. 

1. Kitchen: A company moving from a flexible office provider will expect to have a kitchen (with a sink). But the truth is that most small office spaces do not have a kitchen in the suite, and most office buildings in NYC do not have communal kitchens. Employees are left to wash their coffee cups in the bathroom, which isn't ideal and perhaps not what you'd expect when shelling out your office rent every month. So, having a kitchen is a perk, not a given. And not only is there a communal kitchen in the building, but the landlord's team keeps it clean and stocked with sodas, coffee, tea, and even cereal. 

2. Lounge Area: The lounge area is adjacent to the kitchen, so many tenants will plop down with a coffee and have a chat with a colleague or client. It's an inviting, well-lit area and feels a bit like an airport lounge—in a good way.

3. Mail Services: Ensuring smooth delivery of mail and packages is vital for businesses to operate effectively. And like the communal kitchens, most office buildings do not offer mail-handling services. Missing a FedEx delivery can be frustrating, and having a package sit unsecured in front of your office door for hours (or days) can be worrisome. Some companies that rent office space in a flexible workspace provider might take it for granted, but having a mail room is worthwhile.

4. Conference Rooms: The amenities center has 4 conference rooms catering to various meeting sizes. The largest conference room seats around 20 people, while the smaller ones seat between 6 to 8 people. Each room is fully furnished and equipped with video conferencing, seamlessly integrating virtual participants into any meeting. 

Growing Your Business Within The Building

Company growth is a nice problem to have. If you're growing, business is good. But where do you put the additional desks? Is your current office large enough to accommodate the new hires? The good news is that it's easy to expand in this building, and in fact, the landlord takes pride in it. 

Let's talk about the different office sizes and combinations. The building typically contains 4 units on each floor, with the smallest private offices starting at just 900 square feet. It sounds small, but if your company is moving from a flexible office provider, this might be 3x larger than your current office. The next size up is around 1,000 square feet, then it jumps to 1,500 square feet. 

If your company outgrows one of these standard office sizes—900, 1000, 1500—and now needs 2,500 square feet, you could combine a 1,000-square-foot office with a 1,500-square-foot office. (It's as simple as removing one wall.) Next, you could add another 1,500 to that space to reach 4,000 square feet. Alternatively, you could combine two 1,500-square-foot spaces to create 3,000 square feet across the front of the building. Combining all 4 units on a given floor would give you a 4,900-square-foot full-floor office space. So, as you can see, there are a lot of options. 

Remember, when you combine all the units to create a full-floor office space, you incorporate the hallways into the usable office space—this is why the office loss factor on a full floor is less than a divided floor. 

Picking the Best Location for Your Business

The Bryant Park area is one of the most sought-after locations for office space in New York City. It's no wonder companies like Bank of America and Salesforce chose the location for their NYC headquarters. The transportation options are the best in the city, as you have a dozen subway lines nearby, and Byrant Park lies between Grand Central, Penn Station, and Port Authority. 

According to Wikipedia, Bryant Park is 9.6 acres. It includes the New York Public Library on the eastern portion facing Fifth Avenue and the lawn on the western portion. The park has events year-round. In the summer, there are concerts and movies on the lawn, and in the winter, there is an ice skating rink and a shopping village. You'll also see people playing ping pong and eating lunch at the many green bistro tables throughout the year. Bryant Park Grill is an excellent restaurant for client meetings and team get-togethers, and informal eateries like Wafels & Dinges, Joe's Coffee, and Breads Bakery are there for a quick bite.

There are lots of retail shops circling the perimeter of Bryant Park that also offer many lunch options. Whole Foods and Zucker's Bagels are on the park's west side along Sixth Avenue. You'll find Ole & Steen, Lady M Cake Boutique, and La Pecora Bianca on the south side of 40th Street. To the north on 42nd Street is a Sweetgreen, Cava, and Chopt. And on Fifth Avenue opposite the library is a Cha Cha Matcha and The Bar Downstairs and Kitchen at the Andaz Hotel. So, there are plenty of places to refuel in this vibrant neighborhood. 

In a city where you sometimes feel trapped in a labyrinth of towers, the decision to rent office space near a park is an investment in mental health. It gives employees a sense of space and an inviting place to clear their heads. Studies show that a 10-minute walk in the park can do wonders for productivity and morale. 

Real Estate Office Market Trends in Midtown

Demand for office space in Midtown, though still lagging behind pre-pandemic levels, has shown a notable trend: smaller offices, specifically those under 5,000 square feet, are renting much faster than ones with larger footprints. Simply put, there is more demand for a 2,000-square-foot office than those sprawling over 20,000 square feet. And when there is demand, the asking prices will be firmer and the incentives fewer. 

Here is an example. A company renting a 20,000-square-foot office for a 5-year term could receive up to 5 months free—one for every month of the lease, perhaps even more, depending on the specifics of the deal. But with a 2,000-square-foot space, you're more likely to get 3 months free on a 5-year term, which aligns with pre-pandemic incentives. Of course, every deal is different, and mileage may vary. But be aware that comparing the deal points of different-sized offices is like comparing apples to oranges. It's a different market.

Another trend in the market is short-term leases. With all the uncertainty in the world, fewer and fewer companies are committing to 5- and 10-year leases. Sure, established firms have no issue signing a long-term lease, but newer companies are more cautious. It's unfortunate because a company cannot take full advantage of the down market if they only commit to short-term leases. Think of it like this: You are more likely to get a great deal when renting a large space for a long term. By contrast, if you're renting a small space for a short term, you shouldn't expect the deal of the century. Like a dad says about the buffet, The more you eat, the cheaper it is.  

The rise of hybrid work models has resulted in lower office space usage in New York and increased available office space. While the NYC office market isn't likely to rebound this year, Midtown continues to attract top companies due to its location within Manhattan, prime building stock, and extensive transit options. Tenants, not landlords, are in the driver's seat. But to take full advantage of the office market, you have to be willing to commit. So go ahead and take a big bite out of the Big Apple. 

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