When a business is deciding on a location and where it would like to set up shop in New York, the costs of a commercial lease will greatly impact where the business will be located and how long it can stay there. And depending on the current state of the commercial real estate market, a business might be able to obtain significant concessions from the property owner if they use the market and other conditions of the building to their advantage.
As values of New York commercial real estate continue to rise, many building owners are putting their properties on the market early, often scrapping plans to redevelop the building or sign up new tenants. In some cases owners who purchased a property less than a year ago are looking for buyers.
For a New York commercial tenant, obtaining and keeping a lease is critical to the success of the business. Losing a commercial lease through forfeiture based on an alleged lease violation can threaten a business's survival. To make things worse, when a landlord threatens to terminate the lease or serves a notice to cure or notice of default, the tenant may have only a matter of days to resolve the problem before facing eviction.
For the owner or operator of a store, restaurant or office in New York City, negotiating a favorable lease is often a critical factor in their business's success. Similarly, owners of commercial real estate depend on the cash flow from the monthly rent payments they receive from tenants. For both landlords and tenants a clear and unambiguous lease agreement is essential. But even the most carefully negotiated lease can't prevent every dispute that may arise.
Developing commercial real estate in New York is a complicated process, to say the least. In addition to the parties directly involved in the transaction, state and local government bodies often play an important role in moving a project forward. A project recently approved by the New York City Council is a good example.
Residential foreclosures became a topic of national importance during the recent recession. While foreclosures of commercial property did not become a national issue, they take place on a regular basis in New York and around the country. When owners of commercial real estate face foreclosure by a lender, they should keep in mind that they do have rights under New York law.
The historic office tower at 230 Park Avenue, commonly referred to as the Helmsley Building, has been sold for $1.2 billion. The deal is one of the biggest Manhattan office building transactions in recent years. The 34-story building sits astride Park Avenue just north of Grand Central Station. The tower was constructed in 1929 by the New York Central Railroad Company and served as its headquarters for many years.
Negotiating favorable lease terms is critical for any New York business. Whether the leased space is in an office building, a warehouse or a shopping mall, lease payments represent a substantial expense for the business. Making sure the business gets good value and fair treatment in return is the goal of commercial lease negotiation.
In New York City, lessors of commercial property typically expect some negotiation when they present a proposed lease to a prospective lessee. Obviously, the amount of monthly rent is one of the most critical terms. But base rent alone is not the only figure the potential tenant must consider. Commercial leases vary greatly in terms of which party is responsible for other costs including utilities, property taxes, maintenance and insurance. There are four basic types of commercial lease that handle these costs in different ways.
Renting commercial space in New York City can be a complex proposition. Whether you are looking for retail space, office space or industrial property, it is important to understand key lease provisions and negotiate terms that are as favorable as possible.