How Much Does an Office Space Cost in NYC?
Wed, 09 Jun 2021 | Written by Corporate Suites Staff
The Big Apple is well known for having some of the priciest real estates in the United States, with only cities like San Francisco, CA coming close to it in terms of costs for office space. In fact, renting office space will be one of your biggest operating expenses, and it is often a challenge to find affordable office space options for rent, especially in high-cost areas like Midtown Manhattan. So, just how much will your NYC office space cost? That’s a reasonable question, and this post shares how much you’ll pay to rent a traditional office space, along with the cost of some alternative, cheaper options that may work for your smaller office needs.
Cost to Rent Office Space by Square Foot
When you think of office space rentals, what typically comes to mind is the traditional office space. This option is the most popular, and it is usually reserved for larger teams of office workers. If you are wondering what costs you are expected to incur overall for traditional office space, the price per SF is largely going to depend on the location and prestige of the neighborhood.
For commercial properties, it’s all about prestige. For example, Class B and C offices located in lower Manhattan neighborhoods, such as the Financial District are going to be significantly less than those classified as Class A in Midtown Manhattan. Office space in a neighborhood like the Plaza District will typically run you around $100 per SF a year, while the average rent for the same in the Water Street neighborhood is priced at a more affordable $57 per square foot (SF) a year.
Businesses of all sizes have found ways to create flexibility for workers through robust workspace design, innovative desking options and space structures. The results are what are known as flexible workspaces, and they offer adaptability and scalability, while also providing significant cost savings over traditional workspaces.
Here are four popular flexible workspace options:
#1: Hot Desks
Hot desks, also known as shared working spaces, are available on an as-needed basis by individual personnel. This option is good for sole proprietors and small teams. With this setup, workstations are dispersed around the office area and in-house personnel, temporary workers and visitors use them. Personnel may not have a devoted work area and often do their work at varying workstations from day to day.
#2: Coworking Spaces
Coworking spaces are kind of like large-scale hot desk setups. Corporate Suites coworking space in NYC puts you right in the middle of the action with a lively atmosphere and roomy desk whenever you need it. The option is popular with freelancers, gig workers, and traveling professionals who need flexibility. Coworking is also ideal for small businesses and tech startups that are just getting off the ground and not yet ready to bear the financial obligation of leasing sky-high real estate in New York.
#3. Open Offices
Known as the anti-cubicle, this model has an open office floor plan design that literally breaks down walls. They are available by the hour or by the day, and the design offers structure and familiarity, while quickly accommodating the essentials of daily work. Open offices are conducive to flexibility, reduced construction cost and best of all, increased collaboration and relationship-building interactions between workers.
#4: Hourly Office Space
When business owners are constantly on the move, they may find themselves working in several locations in the city from one day to the next. If this describes you, renting a NYC hourly office space makes sense in this case because of the cost-effectiveness and on-demand flexibility it provides. For instance, if you are hosting out-of-town meetings for clients, you may choose to greet them in a Grand Central Station hourly office rental that’s conveniently accessible to everyone in attendance.
Monthly vs Yearly Leases
When you search for traditional office space and other commercial space costs, you will often see figures along the line of “$52/SQFT” listed. What that boils down to is that you will pay rent for fifty-two dollars per square foot annually or the equivalent of $4.33/SQFT monthly when you lease.
For large businesses, that can mean signing a contract for 1-5 years or more to lock in that rate. This type of lease is usually for a traditional office or commercial space, and it is different from the ones you will find with options like coworking, where the rental cost will be listed in terms of price per person or price per month.
Cost of Serviced Office Space vs. Traditional Office Space
Renting a traditional office, with its associated cost of staffing, equipment and more can put the dream of having a business office out of reach for many small business owners and startups. Fortunately, if you don’t need to use an office full-time, serviced office spaces can offer substantial savings, allowing for a cost-effective way to run your company in a business-like environment.
When you rent traditional office space, you may be paying for facilities that you may not use often enough to justify the cost. A meeting room immediately comes to mind as an example of this. With serviced office space, you only pay for facilities as you use them, and at a much lower fee than renting a traditional office would be.
Office Space vs Co-Working Space
The current average asking rent for office space in NYC Midtown is a little over $85/SQFT. Class A premium offices rent for an average price of just under $95/SQFT, while Class B office space is less expensive and comes in at around $67/SQFT. You can find the most affordable commercial office rentals in Manhattan’s Insurance, Financial and Garment Districts.
Calculating Monthly Rates for Office Spaces
To get the monthly rate of leased office space, you multiply SF cost by the amount of space needed. Then you divide the result by 12 months.
Say you figured that 11 employees need 1,650 SF worth of average space. A Downtown Manhattan office rental rate is $60/SQFT. Using the example above, it is ($60 X 1650)/12, and that comes out to $8,250/ monthly (3-5 yr. lease option).
That figure is base rent only, too, and the estimate doesn’t include additional expenses like building maintenance costs and utilities.
In comparison, coworking prices begin at about $50 per day, and the following table breaks down the basic costs for it and other common office space designs.
|Office Space Design||No. of People||Est. Cost per Month|
|Private Office Space||1 to 6||$150 to $600|
|Small Office Space||1 to 4||$50 to $650|
|Coworking Hot Desks||1 to 2||$50 to $500|
|Meeting Rooms||5 to 30||$30 to $300|
As you can tell, if you don’t require a large team and the devoted use of facilities that come with them, there are substantial cost savings to be had with coworking spaces over traditional office spaces.
Keep in mind that the basic rental price can go up, depending on how much personnel and workspace is needed, along with whether you need private office space, virtual offices, dedicated meeting areas or need additional administrative support
Find Your Managed Office Space in NYC
With private offices, mini suites, virtual offices, team spaces, coworking spaces and more, Corporate Suites has been designing, constructing and managing NYC Office Space for more than 20 years. With our expertise, we can work with your company to design new offices, manage construction and run the day-to-day building management of your traditional or flexible NYC office space. For more information, please contact us at (866) 633-9507. Alternatively, you can book a tour online.