Where to Find the Cheapest Office Space
If you’re looking to find the cheapest office space in New York City, there’s nowhere better than downtown Manhattan (defined as south of Chambers Street river to river). The Wall Street area has always been thought of as the ugly stepsister to fancier and more well connected Midtown, and prices reflect this way of thinking. Back in early nineties, downtown was languishing, thanks to a recession. The vacancy rate was high, and the Giuliani administration came up with the idea to incentivize tenants to stay downtown.
These incentives have, since the early nineties, continued to be renewed. After September 11th, downtown plummeted again, people were abandoning ship left and right. The Wall Street Journal up and moved their people within days of the attacks, and the city figured the only way to get people back downtown was to incentivize their renting there. Since 9/11, downtown has pretty much recovered. Almost the entire south side of Wall Street has been built up, mostly with residential condominiums, and this has breathed life into the rest of the area.
Currently, there are incentives available both for tenants moving from Midtown to downtown and for those moving to downtown from elsewhere. If you’re looking for cheap rent, downtown is the place to be – the current incentive offers $10/square foot off your rent over the course of five years.
- This means you get $2.50 off/square foot for the first three years
- The fourth year, you get 2/3 of $2.50 (or $1.66) off/square foot
- The fifth year, you get 1/3 of $2.50 (or $.83) off/square foot
- This equals out to $10 over five years. For a little perspective, if your rent is $25/square foot, the incentive turns it into $22.50/square foot, which can really add up!
Interestingly, Midtown currently has a higher vacancy rate than downtown. This is perhaps thanks to the fact that the rents are lower downtown, which has led to a more diversified real estate portfolio. Many non-profits and creative firms have come downtown, setting up shop alongside the financial institutions that have historically dominated the district.
Downtown Manhattan is the best deal two times over – 1. It’s always cheaper than Midtown and 2. economic incentives are available. Add these together and you’ve got yourself the cheapest office space on the island. You can read more about the downtown incentives here.