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Rules for Leasing Manhattan Office Space: They've Changed

In the past, leasing office space in Manhattan was relatively simple. Landlord and tenant shook hands and agreed to move forward on a deal. During the period until the lease agreement was signed, the landlord generally would not play the market -- that is, the landlord would not accept a more lucrative offer in the interim. Those days, says Greg Lorberbaum, a managing principal with Staubach's New York City office, are over. "Today, due to a change in ownership, with many out-of-town REITs and real estate speculators instead of traditional landlords, these speculators will accept or bump deals for 50 cents a square foot ($5.39 per sq. m.)," he says. "Basically, now you do not have a deal until you have signed on the dotted line, and this is forcing tenants to have backup transactions that they need as leverage." There also has been a resurgence in unfair, or overly aggressive, lease terms, Lorberbaum contends, which compounds the cost of occupying real estate in ways that are not initially apparent to the tenants. "More than ever, there are hidden costs, and if tenants put themselves in a position where they lose leverage, they will pay a handsome price. But well-represented tenants will negotiate backup transactions, and quality brokers are informing all parties of the exact position that they occupy. When we represent a tenant and pick the building, we let the landlord know that we've picked the building, and that it's our first choice, but that we also have a backup transaction in place should they be unreasonable. We inform the backup site too, and let them know that the likelihood of doing a transaction rests on the other side being unreasonable. This tends to even the playing field." Hmm. Seems the Mets and Yankees aren't the only New York teams that know how to play hardball.

Learn About New York at the Spring IDRC World Congress

The Spring 2000 International Development Research Council (IDRC) World Congress, which will be held in New York City, will give conference attendees an opportunity to find out what hundreds of thousands of businesses already know -- that New York is a great place to live and work, and it's getting better every day! While we encourage you to take a bite out of the Big Apple if you attend the conference, we also hope you will take time to learn about the other regions of New York, and the many reasons why your company should invest in the Empire State. The best place to get this information will be in the conference hospitality room, where representatives of each of the 10 regions in New York will have a booth set up and will be able to provide information about doing business in their region. This room will be open throughout the World Congress. New York is a vibrant, expanding, global marketplace. In 1999, New York ranked No. 7 among states in private-sector growth rate. More than 200,000 jobs were created in New York last year, most of them in high technology, telecommunications, new media and financial services industries. And this growth wasn't isolated to any specific geographic region. All parts of New York outpaced the national average in terms of private-sector job growth. New York's economic vitality is due to a consistent and aggressive policy of cutting taxes, reducing employer costs such as workers compensation and unemployment insurance, consolidating economic development programs (but expanding their resources) and reducing energy costs. The New York State Economic Development Council wants to encourage corporate real estate executives and site location consultants to visit New York and learn more about why our state is where your company should be investing. -- Brian McMahon New York State Economic Development Council