How is Electricity billed for office space in NYC?

How is electricity billed for office space in NYC? In commercial office buildings 3 common methods are used to bill office tenants for electricity. The first and most prevalent way is by rent inclusion, which means electricity is billed on a per square foot basis. The amount typically charged on a per square foot basis ranges from $3.00 – $3.75 per square foot for a general office use. This is not the most efficient way of being billed for electricity. The landlord makes around $1 per sq. ft. profit on this method. If you have a general office use, then you could negotiate this to and around $3.00 per square foot.

The second way a tenant could be billed for electricity is by a direct electric meter which is contracted through a public utility company like Con Ed. This is similar to the way you would be billed for your home or residential electric charges. In this method you pay for the actual cost of electricity. Keep in mind direct electric meters is not an option that you could have in most office buildings. There would have to be one pre-installed or you would have to pay to have one installed.

The third way that an office tenant could be billed for electricity is sub-metering. This is where the office building has a single master connection to a public utility company and then from there the landlord distributes  electricity to various tenants and records their usage with sub-meters. Keep in mind the landlord charges a markup from 5-20%. This amount can also be negotiated. The takeaway from this article/video is now that you know the methodology on how landlords bill electric you can effectively compare cost on the variations of the electricity billing methods. If you are on the market for office space in NYC and would like a free consultation, then you can contact me here. I created a quick video describing how electricity is billed for office space in NYC. Find the link to this video here; How is Electricity billed for office space in NYC? Video.