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The experts at Jonathan Barry Associats with the latest word on the commercial real estate market in New York. Lower Eastside - Home of Hipster Offices Posted by Catherine Isobe on May 14, 2009 Along with all the well heeled Millenials nesting in their Lower Eastside condos, equally young, hip companies are renting Lower Eastside office space. Crain's reports that Hyperfactory, a marketing firm utilizing mobile device strategies, will double their footprint by taking new digs at 455 Broadway. In addition to the high ceilings and quirky loft vibe of a Lower Eastside office, this eclectic downtown area offers intrepid young executive types plenty of great shopping -- from khakis at the new J. Crew (484 Broadway) to hiking shoes at the revamped EMS store (530 Broadway). To me, the Lower Eastside has always meant discount bras at Orchard Corset, not luxury housing and office space for cutting edge companies. But that's what makes Manhattan Manhattan. It's constantly re-inventing itself. Posted in: Lower Eastside Office Space
Green Shoots in the Midtown South Office Rental Market Posted by Catherine Isobe on May 5, 2009 While the first quarter was dismal for most businesses in New York City, there is some evidence of a spring uptick to be gleaned from recent office leasing data, at least in the Midtown South area. The Real Deal reports that the owners of 1407 Broadway recently inked lease renewals totaling over 35,000 square feet, as well as a new lease for a full floor (32,359 square feet) of office and showroom space for the Geneva Watch Group. Meanwhile two finance firms have leased a combined total of 28,000 square feet of new or expanded space near Grand Central Station, at 100 Park Avenue, which is on track to receive a silver LEED rating following a $72 million renovation. These recent deals suggest that Midtown South - the areas near Grand Central and Penn Stations - may not suffer the huge glut of Class A office space seen Downtown and in Midtown North. Also according to The Real Deal, Midtown South Class A office asking rents are currently the highest in Manhattan, at just over $100 per square foot. As we have observed in previous blog posts, where Class B Midtown office space rents are falling, those buildings will offer better value, especially to the small tenant or start up company. Posted in: Midtown South Office Space
The Swirly Goodness of Midtown Restaurant Space Posted by Catherine Isobe on April 28, 2009 One tiny glimmer amid the New York City economic gloom and doom is the first quarter spike in applications for food-related business permits - a 25% year over year increase from 2007. As reported in Crain's Small Business News, this figure is not broken down by borough, nor by any other category. Nor is there any obvious reason so many permits are being applied for when overall revenues in the city's restaurant industry are down 10%-25%, according the head of the New York Restaurant Association. So what gives? I'm guessing at least a few of those new restaurant permits are for new Midtown branches of frozen yogurt chains Pinkberry and Red Mango. Pinkberry, Inc., which has grown faster than its precursor in the frothy fruity glam yogurt business, just secured $5.8 million in new venture capital to expand its 73 store presence in California and New York, according to a report from the Wall Street Journal's Venture Capital Dispatches blog. As more of the top local chefs with overextended credit lines drop like flies, see here and here. As more Midtown restaurant space comes on the market, rents dip, and we're all just a few steps away from a brief love affair with a $6 container of chilly bliss. I'll have raspberries on mine. Posted in: Midtown Restaurant Space Space
Manhattan Office Tenants Getting Greener, Leaner Posted by Catherine Isobe on April 22, 2009 More signs of the ongoing paradigm shift in the New York business community: first, Manhattan law firms and hedge funds, among others, are deserting their Park Avenue office digs to avoid the stigma of conspicuous consumption that now comes with such a fancy address on one's letterhead. It's no surprise, then, that the glut of high end Class A office direct lease and sublet space in these neighborhoods continues to grow. Meanwhile, New York City elected officials, including Mayor Bloomberg and City Council Speaker Quinn, are promoting legislation to require energy saving retrofits of many older New York City office buildings. Once these "green" initiatives get rolling, our local economy might begin to replace the recently departed new construction dollars with federal and private spending on energy audits and the renovations which will follow. The end result for Manhattan office tenants will be a more efficient business model as reduced energy costs trim operating expenses. As Martha Stewart says, It's a good thing. Posted in: Manhattan Office Space
The Cupcake Clause Posted by Catherine Isobe on April 12, 2009 Much of Midtown Manhattan retail is about attracting office workers. Yes, there are also throngs of awestruck tourists who clog the flagship stores in the theatre district and on Fifth Avenue, but Midtown office workers are the more efficient customers. They want to get in, make a purchase, and get back to work, or go soak up the sun on the lawn in Bryant Park. The savvy retailer in a Midtown space caters to these consumers by offering a grab and go lunch, an impulse purchase item or something so essential that it can't wait until the end of the workday -- like an umbrella on a rainy day, or perhaps... a red velvet cupcake. How do you know your product is indispensable? For Crumbs Bakery, located in the Grace Building on 42nd Street between 5th and 6th Avenue, their retail lease is one indicator. The landlord included a clause specifying that Crumbs supply one dozen free cupcakes for its monthly sales meetings. Posted in: Manhattan Commercial Real Estate
Landlord Concessions - What Tenants Should Know Posted by Catherine Isobe on April 8, 2009 When a tenant is deciding on the affordability of an asking rent for office space, I always advise them to take into account the landlord's concessions, if any. New York office rents cannot be negotiated in a vacuum, because concessions and other lease terms can just as easily make or break an office lease deal as the amount of the rent. As The Real Deal reports, New York landlords had been offering concessions that were typically equal to about 7.5% of the total office lease package. In the present commercial real estate downturn, that figure has roughly doubled. Landlord concessions on New York office leases most often come in the form of free rent at the inception of the lease for a specified number of months (usually while the tenant conducts renovations) or as a free office build out to the tenant's specifications. Now some New York landlords are even adding so-called "recognition agreements" to sublease deals. A recognition agreement allows a subtenant to remain in the space at the sublease rent even if the over-tenant, who is often paying a higher rent, defaults. As the number of viable office tenants in New York continues to contract, landlords will become more creative with concessions that do not result in a lower lease rent, but which will still improve the tenant's bottom line. Posted in: New York Commercial Real Estate
New York City Restaurant Space Market Posted by Doug Kleiman on April 4, 2009 It is widely known that restaurants often have as much as a fifty percent failure rate. Current economic conditions have caused great concern to existing restaurant owners and their landlords. The commercial real estate market continues to weaken (from a landlord's perspective). However, new opportunities abound for prospective restaurants as rents drop and vacancies increase throughout Manhattan. The silver lining within this cloud of doom is that prospective restaurant owners can now get in the game and may be able to lease the very same spaces that were unaffordable to them just one year ago. There is also increased inventory of fully built restaurant spaces in New York. These built restaurants are offered directly by landlords, or by the tenant who own them as business establishments. In the latter case, there is often a "fixture fee" or "key money" involved. These fees are often very negotiable. In New York, many experienced restaurant operators as well as novices are looking for deals on built restaurant spaces. One operator's misfortune can turn into another's windfall. Posted in: New York Commercial Real Estate
Chelsea Restaurant Space Posted by Catherine Isobe on April 2, 2009 Chelsea has always been a gold mine for restaurant owners, but formerly it was well-nigh impossible to obtain an affordable space. A walk through the Chelsea neighborhood today reveals unprecedented opportunities for the savvy restauranteur. Retail rents in the Chelsea area have declined 20%-30% from their peak in 2008. A number of restaurants have closed recently, presenting the opportunity to take over a fully built restaurant space that will require minimal renovation to tailor it to the specific needs of an incoming restaurant owner. Chelsea continues to be known as a foodie bastion and restaurant destination. The local demographic is still affluent, and goes out to dine on a regular basis. Chelsea has a strong restaurant-going population consisting both of families with children, young singles who date, and of same-sex, double-income households, all of whom form a great client base for the restaurant trade. Lured by Chelsea's reputation for fine food, people from other areas of New York make it a restaurant destination, as well. If you are looking to open a new restaurant space or expand an existing business, Chelsea is worth a look now as never before! Posted in: New York Commercial Real Estate
New York Office Space - Go to the Head of the Class Posted by Catherine Isobe on March 30, 2009 The Real Deal reports that Class A New York office space vacancies are up 66% over last year. No surprise there. Office space in glitzy, full service Class A buildings is typically 30% more expensive than Class B office space. Small business tenants on a budget in New York are gravitating to Class B (and Class C) office space more than ever. Class B landlords tend to divide their buildings into smaller spaces and they can be more amenable to shorter lease terms than Class A landlords. Anecdotally, we have seen a major uptick recently in demand for Class B office space of around 1,000-3,000 square feet. We have a constant stream of calls for these spaces. Retail tenants who are not absolutely dependent on foot traffic are moving into upstairs office space in Class B buildings because of the lower rents. Sublets in Class B buildings seem to be even more coveted than direct leases. I guess some tenants are commitment phobic at this point. Since Class B space only makes up about one third of the New York office market, rising demand for smaller spaces might cause Class A landlords to get on board with the trend. Stay tuned. Posted in: New York Commercial Real Estate
JBA Secures Space for Gentle Spirit Birthing Center Posted by Catherine Isobe on March 10, 2009 Gentle Spirit Birthing Center, which offers midwifery services for home birth, has taken a 3 year lease at 764 St. Nicholas Avenue, between 147th and 148th Streets in Hamilton Heights. The 2,600 square foot ground floor retail space was offered at $65 per foot by the landlord, Harlem Lofts, Inc., which was represented in-house by Robb Pair. Kevin Jenkins of Jonathan Barry Associates, Inc., represented the tenant. Jonathan Barry Associates is a boutique commercial brokerage specializing in Manhattan office and retail leasing. Founded in 1992 by original principals Jonathan Bernstein and Barry Fass, the company has represented tenants such as Quest Diagnostics, Starbucks and the Corcoran Group. JBA is also the exclusive leasing agent for Stellar Management's flagship Chelsea office property, 119 West 23rd Street as well as several other smaller Manhattan buildings. Posted in: New York Commercial Real Estate
That Left Bank Feel on 29th Street Posted by Catherine Isobe on February 13, 2009 I lived in Murray Hill for several years in the early 90s. Back then it was a sleepy nabe, with its chief attraction being a quick commute on foot to one’s Midtown workplace. Now a wave of hotel and residential development in northeast Madison Square Park and southwest Murray Hill has been substantially completed—just in time to beat the de facto construction moratorium on luxury apartment units in Manhattan. Case in Point—Twenty9th Park Madison, a 34 story glass tower on 29th Street between Park and Madison, designed by architectural firm H. Thomas O'Hara, with 142 units.
So this quasi-Parisian storefront is crying out for something Old World. Something to please the Euro-tourists, young professionals and other area habitués. Talk to This e-mail address is being protected from spambots, you need JavaScript enabled to view it or This e-mail address is being protected from spambots, you need JavaScript enabled to view it at JBA, Inc. (212-366-0364) about this retail opportunity. The vibe and the price are right. Posted in: New York Commercial Real Estate
Office Leasing Strategies in an Uncertain Market Posted by Catherine Isobe on February 12, 2009 At our firm we specialize in representing tenants searching for the best location for their business. We focus on our clients’ bottom lines—maximizing value while anticipating and incorporating industry and company specific needs into each client’s search. We experienced the downturn of the early 90s, after a market peak in about late 1989 or early 1990. While commercial office rental rates declined somewhat, the descent was not as steep as the drop in commercial property values we are seeing today. In this market, opportunities are surfacing in Manhattan office space, which has now become affordable (though not yet in prime Midtown Class A buildings) to companies for whom a Manhattan address was out of reach as recently as last year. However, the dip in office rents is a double-edged sword, as it results from the overall decrease in economic activity affecting businesses across the board. How can you take advantage of newly reduced rents while your own revenues and profits are down? Here’s how: 1. If you are a start-up or your lease is ending, MOVE TO A FLEXIBLE SPACE. Sign a short term lease in a building with frequent tenant turnover. Start small, but make it easy to TRADE UP when your business takes off again. A tenant’s broker can help you find this type of space. 2. If your current rent is in line with market rates, but you have too much space, DOWNSIZE. Sublet part of your space to a complementary business (referrals!). A listing broker can find you the right subtenant. 3. If you like the space you’re in now, but are paying more than the market will bear, RENEGOTIATE. Landlords are willing to be flexible in order to keep a good tenant. We understand how overwhelming it can be to look at dozens or hundreds of potentially appropriate spaces. Therefore, we will evaluate all properties in depth, narrow down the possibilities based on your input and then schedule appointments to show only the 4 or 5 best spaces for you. We are well-versed in the available Federal, New York State and New York City incentives for business relocations and will meet with you to evaluate how your business can access these benefits. The old saying still holds true: in every downturn, there’s an upside. Posted in: New York Commercial Real Estate
I'll Take the Bronx, Brooklyn and Queens Posted by Catherine Isobe on February 9, 2009 If you’re a small business, or for that matter a medium or large business, the City of New York wants to help you set up shop in the boroughs outside the isle of Manhattan (or above 96th Street). The Mayor’s Office of Industrial and Manufacturing Businesses has a website where you’ll find city, state and federal incentives available to companies expanding or relocating to these areas. This year I worked with a manufacturer who needed to expand from 4,200 to 10,000 square feet. She had nearly given up on finding a new factory in the area and was considering moving her operation to the Midwest, but we were able to find her a spot in Brooklyn within one of New York City’s Industrial Business Zones. Unlike Manhattan office space, there is no surfeit of available manufacturing space in geographically desirable areas of the city, thanks to the last decade’s rapid development. Finding the right space for a factory or other industrial use often takes shoe leather, contacts and lots of patience, which is why a tenant’s broker is essential. Posted in: New York Commercial Real Estate
Our Slice of Silicon Alley Posted by Catherine Isobe on February 6, 2009 JBA’s office at 119 West 23rd Street sits several floors above Tekserve, the Apple service center emblematic of this building’s many Silicon Alley. I love riding the elevator with the techies and creative types- they give me hope for the future of our city. I also love this building’s turn of the century character. Like the Cornell Ironworks insignia on the rolled up storm shutters, the luxuriously wide marble staircase running the full height of the building or the ring of squat, pointy topped water towers I can see from my desk. A great corner space on the 7th floor (1,563 square feet) just became available because happily, the tenant is expanding into a larger space. It has North and West views with plenty of those picturesque water towers. My last post opined on the coming demise of those ubiquitous bank branches. Yes, we’re all bracing for a possibly prolonged downturn. That said, I am confident that New York City, particularly Manhattan, will re-invent itself in order to thrive in whatever economy we end up with. New technology, creative endeavors and maybe even a manufacturing renaissance could help us adapt. One encouraging sign -- Silicon Alley venture capitalists are recruiting technical talent from the newly unemployed of Wall Street. Posted in: New York Commercial Real Estate
Reshaping Manhattan Retail Posted by Catherine Isobe on February 1, 2009 As the financial services sector implodes, Manhattan retail may soon be facing Bank Branch Blight, according to Jeff Bernstein over at Urban Digs. The Chase/WaMu deal and Citigroup’s purchase of Wachovia could lead to 40-60 branch closings in NYC, and will press retail rents downward, unfortunately for landlords . Commercial real estate brokers will do more deals on these newly available storefronts, but how will this shift effect commercial landlords and tenants? A resurgence in retail (I mean stores with pedestrian appeal, not mega-chains like CVS ), albeit at lower rents per square foot, could drive a recovery in the Manhattan economy, especially as we draw increasing tourist dollars from overseas shoppers. More and varied retail will also help keep New York City office space more desirable than space in the over-homogenized suburbs. Did we really need ATMs on every corner of Midtown in the first place? Posted in: New York Commercial Real Estate
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