Prebuilt Building Out in Manhattan
Regus announced plans to expand its prebuilt office space footprint in Manhattan with four new locations slated for leasing in the coming year. The Luxembourg-based company has 60 such business centers in the tristate area, 26 of which are in New York City.
New locations include 23,000 square feet at 747 Third Avenue, two floors at 275 Seventh Avenue, two floors at 136 Madison Avenue and space at 555 Madison Avenue. All centers have an open business lounge with wifi, private offices, meeting rooms and virtual offices, said company spokesperson, Grant Greenberg. Regus’s 747 Third Avenue location – opening in February – is it’s first location with a ground floor lounge.
The trend toward prebuilt office space is booming, said Mr. Greenberg. Given economic uncertainty, some companies do not want to be constricted by long term lease agreements, he said, adding that growing companies can also take on more space as they scale. “It’s easier and more flexible than being locked into a long term and more expensive,” he said.
Regus, which maintains some 1,300 prebuilt business centers globally, sees New York as a growth market and there are plans to expand into surround boroughs, Mr. Greenberg said. The company is also finding demand in suburban areas such as Westchester and parts of New Jersey, as companies want to set up offices nearer to their employees..
“We’ve been prebuilding space for over a year and a half,” said Gerard Nocera, partner with Herald Square Properties.
Earlier this year, business intel software developer, QlikTech, leased just over 6,000 square feet of the Herald Square-managed 292 Madison Avenue. The asking price was $55 per square foot. FiftyOne ECommerce took the 17th-floor pre-built space, also sized at 6,035 square feet, in March. FiftyOne ECommerce also has a fifth-floor space in the building, bringing its total footprint to 17,148 square feet.
Herald Square will continue developing its prebuilt offerings, said Mr. Nocera. The company is now building out 12,000 square feet of prebuilt space for another tenant. “Our goal is to just keep on rolling through the building,” he said.
Herald Square has also had prebuilt success at 885 Third Avenue – The Lipstick Building – where it leased 20,000 square feet of office space to three companies, including SBS Partners and SRK Capital, Mr. Nocera said. The company is also building space to suit law firm, Goulston & Storrs, and has plans to build out another 15,000 square feet in the building.
“The nuance for us is that we’ve been extremely successful building 10,000 to 12,000 square foot units,” said Nocera, adding that a lot of prebuilt office spaces are small and might not accommodate companies seeking a larger footprint.
Herald Square also controls 1372 Broadway and though there are currently no vacancies, a lease is set to expire in 2013 and should the company fail to renew, the vacated space will be developed into prebuilt offices, Mr. Nocera said.