Guest Blog: Ben Blumenthal is an NYC-based commercial real estate broker representing clients looking to lease and sell property.
Last Month's Post: A Forward Look at the 2015 Office Leasing Market
As an illustration of last month’s point on tightening concessions, generous work allowances have become more and more elusive. Landlord work-allowances have shrunk and the former “turn-key” installations have begun to get “capped” by landlords at a designated dollar amount. While every deal is different, increasingly frequent are cases of a landlord’s work allowance only covering about 70-80% of a new build-out with the tenant on the hook for the rest. Though the free rent can sometimes supplement the work allowance, it ultimately leaves the tenant coming out of pocket more now than previously.
Compounding this market trend as a double whammy is the rise of construction costs to almost double where they were just a few years ago. The sheer demand for construction services and materials has pushed the already high cost of construction in the city higher. Both trends are obviously a function of a strong NYC economy which should translate into increased revenues lines for existing tenants in the city and their businesses.
By: Benjamin Blumenthal
Associate Director of Leasing | Norman Bobrow & Co. Inc.