How Long Does It Take to Find a New Office Space in New York City?
Finding a new office space in New York City is never a quick and easy process and the length of time it takes depends on many factors. The below is a breakdown of the process along with a timetable of going conducting a relocation from start to finish. The process is complicated and there are many factors to consider other than simply finding a space that looks nice.
Understanding the best size for your business, whether you want a custom-built space or can live with an existing installation, the quality of building, the neighborhood, the nuances of a term sheet, and of course the total economic package are all part of the factors that need to be evaluated along the way. Likely a lot will change during the process as you better understand the market so best to spend time upfront preparing.
The most important factors to consider when to laying out a time schedule for leasing a new office space are, do you want your new space to be built tour your organization’s specifications, how long of a lease are you looking to sign, and how do you see the stability of your organization’s headcount growth? If significant construction is factored in, then clearly the timetable will be longer.
Step 1. Strategic Planning. (Before you start looking at space) 1-2 months
Engage a qualified broker. (This is important, and you can read the reasons why in my other blog on this topic.)
➡️ For insights into whether hiring an exclusive broker makes sense for your company, check out Should a Company Hire an Exclusive Broker?.
If you are coming off a long lease have your broker review your lease, current rent statements and real estate tax bills (if separate from monthly invoice) to understand exactly what you are paying on a per sq foot basis and a per annum basis. This is critical information to have before you engage the market.
What is your desired layout?
Understand what market loss factor means
Understand the commuting patterns of your employees and the cost differentiation of the various submarkets.
Needs assessment – What else is important – Building amenities, being near certain clients, proximity to certain transportation hubs or subway lines, 24 security, does the building need to convey a particular image, etc?
How long of a lease are you willing to sign? This is a critical consideration, because construction in costly and a lengthy process so if you are looking for a short-term lease the options become more limited, and if you want space built to your specifications than a lease of 7-10 years will likely be required.
➡️ For more details on how lease lengths impact options and costs, read Why Length of Lease Matters.
After discussing these details your broker will prepare a survey of availability spaces for your consideration.
Step 2. Option Development 2-5 months
Tour the options.
Have your broker provide a comparative financial analysis of the various options.
➡️ For insights into understanding financial terms in NYC leases, check out Deal Economics in a NYC Lease: What You Need to Know.
It may be necessary to engage an architect to provide test fits of the desired options. This is a service the landlords will often provide once a proposal is submitted.
Draft proposals to submit the landlords. It’s ok to submit multiple proposals
Negotiate the term sheets.
Fine tune the test fits and layouts of the space
If you are moving into a move in condition pre-built space, then the test fit is not necessary. Or if the Landlord is simply building an office and providing new paint and carpet
Decide on which space you are going with and finalize the term sheet.
If your company or organization needs board or corporate approval that can cause additional delays.
Step 3 – Lease Negotiation 1-2 months
The landlord’s attorney will draft a lease and your attorney will review.
➡️ For help deciding between direct leases or subleases during negotiations, explore Direct Lease vs. Sublease: Weighing the Pros and Cons in NYC’s Office Market.
I cannot stress enough the value of having an experienced NYC real estate attorney review the lease.
No matter what the process takes longer than expected.
Step 4 – Construction: 0-6 months
There is no way around it. Construction in NYC takes a while
➡️ For insights into how construction timelines impact office moves, read The Latest on Manhattan Office Conversions: A New Era for NYC Real Estate.
If the space is pre-built than no work
Paint and carpet would take under a month
Any construction takes time. The Landlord is going to bid the job with several vendors, construction drawings have to be prepared and filed with the city. Materials have to be ordered, and then then space has to be built.
Total time: 4–15 months
I would be delighted to discuss the process with you and help your organization make the best decision.
Paul Walker
212-984-7117
Paul.Walker@cbre.com