Top 3 Hidden cost when renting office space in NYC!
The top 3 hidden costs when renting office space in NYC.
The first hidden cost is the mark up of office space. The advertised square footage of office space is marked up around 20-50%. The mark up is hidden by using clever real estate terms. This is what is hidden from you. Landlords created a term called the loss factor percentage to mark up the square footage of office space and then they created another term called rentable square feet to conceal it in the advertised square footage of office space. If you would learn more about how not to be overcharged for office space in NYC then, watch this quick video titled; What’s a Loss Factor in NYC Commercial Real Estate?
The second hidden cost is the markup of electricity for office tenants. Landlords markup the cost of electricity when using a billing method called rent inclusion which currently increases the cost of electricity by around $1 per square foot. Landlords also mark up the cost electric by 5-20% when using a billing method called submetering. If you would like to learn more about how not to be overcharged for electricity then watch this video titled; How is electricity billed for office space in NYC?.
The Third hidden cost when renting office space in NYC is the hidden cost of how rent escalations could meet or exceed the initial rent or base rent in a long-term office space lease. There are two methods of escalating rent that have been known to excessively increase the rents in a long-term lease if it’s not negotiated properly. The first method for escalating rents in NYC is the fixed index formula. The second method for escalating office space rents in NYC is the variable index formula. These percentage increases must be negotiated aggressively because they multiply geometrically and may eventually cost you more than your initial rent or base rent of an office space lease.
If you are on the market for office space in NYC and would like a free consultation with me, then you can contact me through my website below.