The Big Apple: Understanding Office Options
If you ever walk in New York City, you’ll quickly realize the stores have a different vibe, the architecture suddenly changes, and people have a different aura. This is the beauty of Manhattan. Go ten blocks, and all of a sudden it’s a new experience.
The same is true with office space. When you decide to open an office in NYC, the first thing you need to do is understand that your NYC might not have anything to do with someone else’s NYC. If you’re a top hedge fund in London and you want to dip a toe into the Manhattan water, you’ll probably end up in the Plaza District paying somewhere between $80 – $200/s.f. On the other hand, if you’re a hot tech company coming out of Palo Alto and want to be part of the up-and-coming tech scene in NYC, you probably should avoid the Plaza District and those steep rents and go directly to Union Square.
So when tasked with opening an office in Manhattan, the thing to realize is that the Big Apple is really many apples, and the most important apple is clearly the one that makes sense for you. So we’ll give an overview of the key sections of Manhattan from an office perspective and offer insights for each:
Plaza District: This is the area directly south of Central Park, from 3rd to 7th Avenue. The crown jewel of the Plaza District is 9 West 57th Street and the General Motors building. These are usually the two most expensive buildings in New York. The views of Central Park are spectacular. The firms that occupy them trend toward financial services, hedge funds, and large corporate headquarters, and rents are not for the faint of heart. Park Avenue between 45th and 57th is known as Hedge Fund Alley, with iconic structures like the Seagram’s Building, Lever House, and 450 Park among the places you’re likely to bump into this year’s Masters of the Universe.
Wall Street: The lower end of Manhattan is the polar opposite of the Plaza District. Believe it or not, if you’re looking for the lowest rents in Manhattan, you’ll find them downtown. Wall Street, often defined as south of Fulton Street, runs river-to-river and is home to many law firms, trading companies, and non-profits. This is where you can find suitable space, often with good views for $25 – $50/s.f. or about half the cost of comparable space in mid-town Manhattan. A big plus for downtown, in addition to price, is transportation. Nearly every subway line runs through downtown, proximity to Brooklyn is fantastic, commuter busses from outer boroughs stop there, and the new transit hub to the Freedom Tower will be iconic when it comes on-line.
Union Square: When General Assembly opened its doors at 902 Broadway, it was like sticking a flag in earth and declaring Union Square as the tech epicenter of New York City. Tech companies large and small flock to Union Square. Firms here are young, hip, and smart. Union Square also boasts the lowest vacancy rate in Manhattan. Rents can be south of $30/s.f. in older and smaller side street buildings. But if you’re in better buildings on Broadway or Park Avenue South, expect to pay closer to $40-$50 or more. The space you’ll find there will be converted lofts and old manufacturing facilities. Restaurants here rock, with “beautiful” people everywhere.
Grand Central: If you live in Westchester County or Connecticut, you travel by Metro North and land in Grand Central Station. Wouldn’t it be nice if your office were a short walk from the train? This is why so many firms have set up shop between 40th and 45th Streets, 3rd Avenue to Fifth Avenue.
The buildings in and around Grand Central range from Trophy Buildings to side street hovels and everything in between. There are a handful of buildings that have direct access by tunnel to Grand Central. This means you don’t get wet or cold going from desk to train, and commuters enjoy the Lincoln Building, The Chain Building, 317 Madison, 230 Park, and the Graybar. These are solid A- buildings chock full of smaller companies. The Chrysler Building and 450 Lexington are among the nicer and more expensive buildings in area. The higher you go at 200 Park, right above Grand Central, you can see the rivers, the Statue of Liberty, and Central Park.
Penn Plaza/Times Square: If you live in New Jersey or Long Island and come into Penn Station or Port Authority, there are a handful of Class A buildings near both transportation hubs. 1 Penn Plaza on 34th Street is the best near Penn Station and the new New York Times building in Times Square is equally good if not better. Rents will range from $50-$100/s.f. But the life blood of Penn Plaza and Times Square is lower end. This area was the original “Garment Center” in NYC, and other than a handful of Class A buildings, these areas are now home to many fashion companies, manufacturing firms, non-profits, and low-end retailers.
Hudson Square: This area, on the West Side of Manhattan above Tribecca, has emerged an extremely hip area. Running from Canal up to Houston is an area that once was home to printers who needed big, cheap industrial spaces. But with the gentrification of New York, printers are nearly extinct in this area and have been replaced by media companies and high fashion. The building stock is typified by high ceilings, large windows and a cool industrial feel. Typical prices are $35-$45/s.f. On the street, you’ll find some of hippest clubs and restaurants in the city.
New York City provides an exhilarating business environment not found elsewhere in America and offers an amazing range of office space choices. Therefore, it is critical to be informed so you take the right bite of the Big Apple.