Author Archives: NYC Office Space

Are NYC’s office brokers neglecting startups?

zandieh startups

Considering the real estate industry’s current obsession with tech companies, this number is surprising: a third of New York’s tech startups have never been contacted by a leasing agent, according to a new survey by real estate consulting firm RE:Tech.

This may be because many of these startups are simply to small to appear on brokers’ radars, according to RE:Tech founder Ashkan Zandieh.

“If a company doesn’t announce a funding round or is too small in size, many commercial real estate brokers will be uninformed about the startup,” he said, and may also shy away from spending time and resources building relationships with fledgling companies.

Some brokerages have tried to tap into the startup boom. Earlier this month, tech-focused office brokerage TheSquareFoot teamed up with PivotDesk, which allows startups to sublease office space from larger companies. TheSquareFoot will refer startups looking to sublease to the shared-office platform, while PivotDesk can in turn refer firms looking to upgrade to regular leases to TheSquareFoot. Meanwhile, brokerage giant Avison Young invested in LiquidSpace, a listing platform for short-term office space.

Still, the survey, which included responses from 50 New York startups, seems to indicate brokerages have a ways to go in their courtship of these companies. Brokers who forge an early connection with these startups stand to profit handsomely if the firms take off. Several real estate firms are among the fastest-growing tech startups in New York, attracting millions in venture funding.

Less surprisingly, the survey found that the vast majority of tech startups favor flexible, short-term leases. About 80 percent of respondents said they favor a sublease over a lease. About 60 percent said their ideal lease term is between three and five years, while the remaining 40 percent preferred a lease term of between one and two years. None of the respondents were keen on five-year-plus lease.

“We need flexibility,” one of the respondents wrote. “The future is very unclear and can bring tremendous growth, no growth, or going out of business.”

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Ruth Colp-Haber makes The Commercial Observer’s exclusive list.

Commercial Observer’s Exclusive Guide to NYC’s Boutique Brokerages

Ruth Colp-Haber

Wharton Property Advisors

Founder: Ruth Colp-Haber

Date established: 1992

Number of employees then: 1

Number of employees now: 6

When Ruth Colp-Haber established Wharton Property Advisors in 1992, she was a company of one. Now, 23 years later, the team has grown to six, yet Ms. Colp-Haber continues to oversee every transaction, something presidents of larger firms are generally unable to do.

Wharton specializes in high-end, pre-built spaces, mostly in Manhattan. Ms. Colp-Haber has always believed that pre-built, turnkey spaces provide the best value in the market: All of the work has already been done. “The money that would go into construction on the space can instead be given to the tenant in rent concessions,” she said.

Creativity, she said, is an element in her firm’s success. It’s a skill necessary for, say, marketing so-called difficult spaces: unusual layouts; short remaining leases. For example, she said, “I often take big spaces and set up incubators with several small tenants. The goal is to bring in subtenant revenue by hook or by crook.”

Recently Wharton represented The Argentum Group, a private equity firm, in renegotiating their lease for 6,000 square feet at 60 Madison Avenue. The asking rent was $78 per square foot. Last month Wharton closed a deal for a 3,000-square-foot turnkey space in The Empire State Building (350 Fifth Avenue) for Coalition, a financial firm based in the U.K. Asking rent was $62 per square foot. “Small becomes big. You do a good job and you get more work,” she said.

That said, small does not have to become too big to succeed.—S.P.

Inside the Ark, a posh JFK ‘terminal’ for animals that could make serious hay for its investors


Cliff Bollmann is one of the world’s leading airport architects. He designed the spiffy JetBlue terminal at John F. Kennedy International Airport and worked on others in San Francisco, Boston and Chennai, India. He knows exactly how far bathrooms can be situated from gates so passengers don’t miss the last call for their flight.

But this international-airport expert is bit befuddled by the plumbing involved in his current assignment: designing a terminal at JFK called the Ark, dedicated to serving pets, livestock and zoo animals. For Mr. Bollmann, the question is: How to handle all the bull poop?

In addition to giving temporary shelter to furry and feathered friends in transit, the Ark is designed to house dozens of horses, as well as up to 180 head of cattle that are capable of producing 5,000 pounds of poop every day.

Failure to efficiently dispose of this formidable load could lend an unacceptable stink to a project ­designed to attract the sort of high-end clients who transport their Pomeranian pooch or Persian ­pussycat to far-flung locales. So Mr. Bollmann and his colleagues at architecture firm Gensler have come up with an ingenious plan: Angle the cattle-pen floor just enough so that manure slides away into a receptacle below. They call it the “poo chute.”

“Way too much thought has gone into this,” said Mr. Bollmann with a sigh. “There have been a lot of five-hour meetings.”

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Albany Update (06/26/15) Letter from REBNY President


Dear Member:The State Legislature passed an Omnibus Housing Bill last night which contains many items beneficial to our industry:  a four year extension of the coop-condo abatement program, a four year extension of 421a and rent regulations, a four year extension of J-51and a two year extension of economic incentives for Lower Manhattan and the boroughs.  The bill does not include a New York City Mansion Tax.

Here are the highlights to these programs.


The coop/condo abatement has been extended for four years, until June 30, 2019.  There is no change in the eligibility requirements and in the amount of the benefit.


The program has been extended to June 15, 2019.

Regarding wages for construction, the law requires that a memorandum of understanding be executed before January 16, 2016 between the largest trade association of residential real estate developers and the largest trade association representing building and construction workers with membership in New York City that includes provisions regarding wages and benefits for construction workers on buildings over 15 units that receive 421a benefits.  If a memorandum of understanding has not been executed by that date, the new construction aspect of the program will be suspended and no new applications accepted.

A project seeking to vest benefits under the current program has until December 31, 2015 to meet the commencement of construction requirements. For those members who have the ability to commence construction, including those who have commenced after June 15, 2015, such projects meeting the requirements will be covered by the current law.

The new program which would take effect on January 1, 2016 would require any rental project in the city that receives 421a to provide on-site affordable housing.  Here are the three options an owner may select:

Affordability Option A: 10 percent at no more than 40 percent of AMI, 10 percent at no more than 60 percent of AMI and 5 percent at no more than130 percent of AMI.  Years 1-25 would have a 100 percent exemption; only the mini tax would be paid.  In years 26-35 there would be a 25 percent exemption, requiring that 75 percent of the taxes plus the mini tax would be paid.  Projects would be eligible to receive tax exempt bonds and tax credits.

Affordability Option B: 10 percent at no more than 70 percent AMI; 20 percent at no more than 130 percent AMI.  Years 1-25 would have a 100 percent exemption; only the mini tax would be paid.  Years 26-35 there would be a 30 percent exemption, requiring that 70 percent of the taxes plus the mini tax would be paid.  These projects would be eligible for substantial government assistance.

Affordability Option C: 30 percent at no more than 130 percent AMI; Years 1-25 would have a 100 percent exemption; only the mini tax would be paid.  Years 26-35 there would be a 30 percent exemption, requiring that 70 percent of the taxes including the mini tax would be paid.  These projects would not be eligible for substantial government assistance.  Also, this option is not available in Manhattan south of Ninety-Sixth Street.

The new program contains a homeownership option-Affordability Option D-which would provide 421a benefits for condominium or cooperative housing projects containing not more than 35 units located outside Manhattan where 100 percent of the units shall have an average assessed value not to exceed $65,000 upon the first assessment following the completion date and where each owner of any unit shall agree in writing to maintain the unit as their primary residence for no less than five years from the acquisition.  A homeownership project that meets the eligibility requirements receives a 20 year benefit.  Years 1-14 would have a 100 percent exemption, only the mini tax would be paid. For the final six years there is a 25 percent exemption requiring that 75 percent of the taxes plus the mini tax would be paid.  However, no exemption shall be given for any portion of a unit’s assessed value that exceeds $65,000.

Extended Affordability Program: The new law adds an extended affordability program.  80/20 projects which commenced construction before July 1, 2008 may elect to become an extended affordability project by retaining their 20 percent affordable units at 80 percent AMI and add 5 percent more at 130 percent AMI, for 15 years.  A project that meets these requirements would receive a 15 year exemption at 50 percent a year which would commence at the expiration of their current exemption.  (If the 80/20 project was receiving a 25 year benefit the extended affordability benefit would be for 10 years.)  In addition, these projects must pay prevailing wages for their building service workers.  All affordable housing units shall be subject to rent stabilization.  At the end of the extended affordability period, the affordable units shall have the right to remain as rent stabilized tenants for the duration of their occupancy.  Upon vacancy, an affordable unit shall remain fully subject to rent stabilization unless the unit is entitled to be removed because its monthly rent exceeds the deregulation threshold. The application for any extended affordability property shall be filed with HPD on or before the later of: December 31, 2016 or eighteen months after the expiration date of the initial benefits.

Other changes to the 421a program include:

  • The market rate units built under the new program are not covered by rent regulations if their initial rent or legal rent on vacancy exceeds the then vacancy decontrol amount.
  • The new program does not contain the underutilization test or the maximum rent test.
  • Commencement date has been redefined for both the new program and the current program.  Commencement date is defined as the date upon which excavation and construction of initial footings and foundations lawfully begins in good faith.  A full building permit is not required.
  • Affordable units shall share the same common entrances and common areas as the market rate units, and shall not be isolated to a specific floor or area of the building.
  • The new fee for a 421a application is $3,000 per apartment.

RENT REGULATIONSRent regulations have been extended until June 15, 2019. The legal rent for high rent and high income, high rent deregulation has been increased to $2,700, and beginning January 1, 2016 and annually thereafter the maximum legal regulated rent for the deregulation threshold shall be increased by the same percentage as the most recent one-year renewal adjustment adopted by the rent guidelines board. For apartments in which the tenant prior to vacancy was receiving a preferential rent the vacancy allowance increase on the legal regulated rent will be limited in the following manner: The legal regulated rent increase shall not exceed:1.     five percent if the last vacancy lease “commenced less than two years ago”;2.     ten percent if the last vacancy lease “commenced less than three years ago”;3.     fifteen percent if the last vacancy lease “commenced less than four years ago”; and4.     twenty percent if the last vacancy lease “commenced four years ago or more”. These restrictions do not apply to apartments leased at the legal regulated rent.The recapture period for Major Capital Improvements (MCI) has been extended, but still remains permanent:

  • For a building with 35 or fewer units the recapture is eight years
  • For buildings with more than 35 units the recapture is nine years

This change applies to any determination issued by the Division of Housing and Community Renewal after the effective date of the law.The State and City are authorized to provide a real property tax abatement to compensate owners for the loss in value due to the extension of the MCI recapture periods. J51The final date for completion of renovation projects eligible for J-51 benefits is extended to June 30, 2019ECONOMIC INCENTIVESThe Industrial and Commercial Abatement Program (ICAP) which provides tax incentives for renovation and new construction was extended two years, allowing applications to be filed until March 1, 2019. The Relocation and Employment Assistance Program (REAP) which provides tax credits of $3,000 per eligible employee per year was extended for two years to June 30, 2017.  This extension includes the aspect of the program that applies to Lower Manhattan and to the other boroughs. The Commercial Revitalization Program (CRP) which includes a real property tax benefit to tenants, as well as the Commercial Rent Tax (CRT) exemption and the Energy Savings Program, was extended for two years.  CRP is available for leases commencing by March 31, 2018.  The CRT benefit is available for leases commencing by June 30, 2017.  The energy programs allow approval of applications filed by June 30, 2017. The Sales Tax Exemption program for the World Trade Center, the World Financial Center and Battery Park City was extended to cover leases with terms commencing by September 1, 2019.   The Sales Tax Exemption program for the other areas of Lower Manhattan, generally south of Frankfort and Murray Streets, was extended to cover leases with terms commencing by September 1, 2017. The Commercial Expansion Program (CEP) which provides real property tax benefits for tenants in designated commercial districts in the boroughs was extended for two years to June 30, 2018LOFT LAW The law reopens applications under the 2010 Loft Law expansion for an additional two years and establishes compliance language for loft units. The changes to the 421a program and rent regulations are expected to raise questions as these changes are implemented.  We will continue to update you about these issues and how they should be addressed.  Please contact the Research Department ( or 212-616-5209) with any questions.Cordially,

Steve Spinola


The Real Estate Board of New York, Inc. 570 Lexington Avenue, New York, N.Y. 10022 TEL (212) 532-3100 FAX (212) 813-1938
Over 100 Years of Building and Serving New York


Companies seeking new luxury office space should check out 432 Park Ave.

The developer is asking up to $175 per square foot for space at the new development.

432-Park-Ave-Editor’s Note: An earlier version of this article and the headline incorrectly stated that some office tenants will  have access to the high-end amenities that are being constructed for residents at the adjacent condo at 432 Park Ave.

The tallest residential tower in the Western Hemisphere, 432 Park Ave., has attracted some of the world’s richest condo buyers. Now the project’s developer, Harry Macklowe, is planning to bring deep-pocketed office tenants to the ultraluxury project.

Attached to the 1,400-foot-tall pencil-thin tower will be a six-story, 71,000-square-footoffice building facing East 57th Street. The cube-like structure will go by the same 432 Park Ave. address as the residential tower, which it abuts.

Asking rents at the luxury commercial building will be among the highest in the city—starting at $150 per square foot and running as high as $175 per square foot for its top floor, which will feature a 1,600-square-foot glass penthouse that connects to a 5,000-square-foot outdoor roof deck.

“The object was to bring everything together, to subtly unite all [the building’s] elements,” Mr. Macklowe said. “You feel quality, substance and strength.”

“The tenants who choose to locate their offices at 432 Park will likely be high-end financial companies, well-heeled family offices and luxury brands,” said Paul Amrich, a broker at CBRE Group who was hired by Mr. Macklowe to lease the office space.

Mr. Macklowe developed the residential tower at 432 Park Ave. in partnership with Los Angeles-based real estate investment firm CIM, but he owns the office and retail components of the project alone. In addition to the office space, 432 Park Ave. will have 58,500 square feet of retail. The retail will be located in the 127 feet of ground-floor frontage along East 57th Street, one of the city’s most luxurious shopping corridors. One block away, Mr. Macklowe is also constructing a dedicated glass retail box, with below-grade retail space, on the corner of East 56th Street and Park Avenue.

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20150507 WTC hub PIX

Controversial World Trade Center transportation hub to open next month

The architecturally controversial WTC transportation hub designed by Santiago Calatrava is set to open next month.

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As office space gets smaller, changes in office dynamics

As the average amount of space per office worker has dropped, the dynamic in the office environment has changed.

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2 Gansevoort Street

Yesteryear’s $3 per-square-foot space goes for $100-plus

Nearly 70 years after buying a building in Manhattan’s grimy meatpacking district, the landlord has just cut a deal for the penthouse at a very tasty rent.

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1049 Fifth Ave

How do you get a Park Avenue address?

Location, location, location. Developers do what they can to get their projects a prestigious address. This New York Times article reveals some ways to turn a project into a prestigious Park Avenue address.

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12 Ugliest Buildings in NYC

TimeOut New York reviews what some consider the 12 ugliest buildings in New York City

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