Buying office space in any city can be daunting, as we all know that this is where business costs can skyrocket. However, if you know how to get the most out of your money and shop around, there are ways to keep the costs low. In this article, we will look at average costs around New York and our top tips for getting office space in New York on a budget.
Cost of Office Space in New York
It’s no secret that New York is an expensive city to live in, being the 6th most expensive city in the world to purchase office space in 2019. So, let’s put that in perspective and look at how that reflects on office prices in the big apple.
The majority of reasons for the cost of rent will be down to location. According to Statista, The average cost of rent for Class A office space in Midtown Manhattan was $82.56 per square foot in 2021, Q2. However, this didn’t top Midtown South at $99.22 per square foot, which is home to places such as Time Square, Grand Central Terminal and Madison Square Garden. However, looking at submarkets, some areas exceeded this greatly, jumping to $125.34 in Hudson Yards/ Manhattan West. With an average density of around 150 square feet needed per employee, a class A office space for 20 employees will easily result in around $247,680 per year.
On the other hand, in 2020, Class B office space recorded an average of $61.66 per square foot, with class C asking for an average of $51.94. So, by looking at lower-class offices, you could be looking at a much lower rent of $155,820 per year. A saving of around $91,860 per year compared to a class A office in Midtown Manhattan.
How to find a low-cost office in New York
We have briefly mentioned how area and office class can impact the cost of your rent, so let’s dive in deeper and get a better understanding of how to save money when renting offices in New York.
Class of office
There are three classes of office that you can look for – A, B, and C. Class A office spaces refer to the newest, shiniest and most modern of your options in the more upmarket areas. These offices are likely to come with plenty of tempting added extras, all of which come at an expensive cost.
Class B offices are slightly less new but are still great looking places to work in, and in a nice area, costing slightly less, you’re getting a good quality office without compromising on too much.
Class C offices are the older and potentially more worn of the three. Likely to be a bit outdated in looks and technology, these offices will give you the basics to get started with your first office, with the cost per square foot being most in your price range.
To save money, we advise you to consider your needs – do you need a sparkly new office to present to your clients, or do you just need somewhere to start building your business?
Consider the class and area that you are looking to rent in. Whilst Manhattan will be expensive for you, looking in areas like Staten Island and Brooklyn will reduce your rent considerably. Additionally, it’s important to ensure there are plenty of local amenities such as cafes and restaurants, as well as public transport to ensure your office is accessible to your employees and clients.
You might find that the more amenities that surround your office space, the more you will pay in rent, but don’t be discouraged by this, as there’s a balance you will have to strike between cost and area quality – no one wants to visit or work in the middle of nowhere.
The more employees you cater to, the more you’ll pay, so why not consider flexible working. Allowing your employees to work from home on certain days of the week can mean you have 50% more workers than desk space, therefore half the square footage you would have needed otherwise.
A similar alternative to flexible working is a flexible workspace. If you don’t feel it’s imperative to your business’s growth to have a permanent office space yet, why not consider coworking spaces. Renting a shared office space alongside other companies can significantly reduce your overheads by only paying for the space you need, with the ability to expand or scale down the space at any point.
Day offices are a superb flexible workspace option, too, as you can rent anywhere from an hour to a full day, meaning if your employees typically work from home, but you’d like to have a day in the office to catch up, you can do so at a small cost.
It can be exciting to start renting your first office or even upgrading to a better one. However, it’s important not to be caught out by the exciting extras that can be ever so tempting. Amenities can include such things as; a receptionist, meeting rooms, lounge area, kitchen, coffee machines, Wi-Fi, private offices and conference rooms.
Some of these may be essential to your work; however many are unnecessary perks which will only add cost to your rent. So, consider how many meeting rooms you really need and save the rest for when your business starts to thrive.
In order to support businesses, the city of New York has developed incentive programs. These programs can offer Tax credits, money per square foot of your business and electricity savings, as long as you meet certain criteria, and can be claimed between 3 to 12 years, depending on the program.
If renting an office is still out of your budget, you might want to consider moving online. By subscribing to a virtual office, your business can be set up in any location you’d like, meaning you can still work in a “New York Office” without the huge overheads.
However, if you’re wanting to find an office space for rent in New York, then contact our experts today, and they can help you find the perfect workspace for you!