Frequently Asked Questions
• When should I begin the process of looking for space? How long does the whole process take?
Depending on your requirement, we recommend 4 – 18 months prior to occupancy. A sublease or prebuilt space can be had sooner. For a longer term deal that requires a build out, it is standard to allot 3 – 6 months following the signing of the lease to build out the space.
• Why should I hire an exclusive broker?
There are numerous reasons for hiring an exclusive broker. Some of the main reasons include:
· Your interests are aligned. An exclusive broker has no incentive to steer you to a particular property, you will see the entire market
· More time and resources will be allocated in the search process, and an exclusive broker will negotiate the best possible outcome for the tenant, as a deal is assured. It’s about the right solution, not the quickest
· Will have landlords competing for your tenancy
· Will save you time and distractions
· Landlords will take your potential tenancy more seriously.
• Who pays the brokerage fee?
In New York City, it is standard practice for the landlord or sublandlord to pay brokerage commissions. This practice allows brokerage services provided to the tenant to be free of cost.
• What are the upfront costs associated with leasing an office space?
Outside of the annual base rent, a tenant should be aware of additional costs such as security deposit, furniture, legal fees, IT expenses, build out expenses, architect and design expenses, and moving costs. For more information on these additional costs, give us a call.
• What is the standard lease term in New York City?
The standard term in New York City for established companies is between 5 and 10 years but varies depending upon size and growth potential. Startup firms prefer terms shorter than 5 years to mitigate risk, while larger corporations favor terms of at least 10 years to lock-in fixed costs. Landlords prefer lease terms of at least 5 years, but may be willing to consider shorter term deals.
• What are the advantages / disadvantages of subleases?
Key benefits of a sublease are typically shorter lease terms than a direct deal, space that is built and furnished, and depending upon the sublandlord’s financial position, potentially heavily discounted. Key disadvantages can be the sublandlord’s credit and difficulties with the renewal.
• Are there advantages to a longer term lease?
Yes, in a longer term lease the landlord will provide a larger concession package in the form of free rent and tenant improvement allowances. In addition, many tenants prefer to lock-in fixed costs for a longer duration.
• Will I have to build my own space or is it possible to get prebuilt space?
In most larger New York City lease transactions, a landlord will provide a construction allowance to build out space. For requirements +/- 10,000 sq. ft., tenants may be able to lease prebuilt space.
• What is a good guy guarantee?
It is a limited personal guarantee which typically requires one of the firm’s principals (or creditworthy affiliate) to guarantee the rent and other payment obligations under the lease through the date the tenant surrenders (vacates) the premises to the landlord, even if the date of surrender occurs prior to the stated lease expiration date. The guarantor’s personal liability ends when the space is vacated. Every good guy guarantee has a notice requirement, requiring the tenant to provide advance notice of surrender (90 days is a typical notice period, but it can easily be longer) before a guarantor is released. You will absolutely want your exclusive broker negotiating the good guy guarantee on your behalf.
• Do I need a lawyer to negotiate my lease?
We strongly recommend that you hire a lawyer who has experience with New York City office leases. While it may be tempting to use a generalist or in-house attorney, New York City office leases are heavily negotiated documents that an inexperienced attorney can have trouble with.