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You won’t believe how much a city agency is paying for office space in a century-old building
The rent at 109 East 16th St. is expected to balloon to $112 per sf in the next 20 years
A city agency plans to spend more than $20 million a year to rent a bare-bones office building in Union Square — a price commensurate with modern buildings in Midtown and Downtown.
The city’s Human Resources Administration will renew its lease for 264,358 square feet at Gould Investors’ 109 East 16th Street, the New York Post reported. The building — constructed in 1909 — has a starting rent of $76.83 per square foot — but that’s expected to increase considerably over the next 20 years. After a planned renovation, the city will pay up to an additional $13.89 million, the Post reported. After the renovation, the rent will rise to $82.12 per square foot in June 2023, and then $91.15 per square foot from June 2023 to June 2028.
Compare that to Midtown South Class-B asking rents, which sit at the low $60s per square foot, according to JLL [TRDataCustom].
In the last leg of the 20-year lease — 2033 to 2038 — the rent will jump to $112.28 per square foot. HRA employs more than 14,000 people and has a $9.7 billion annual budget.
The city’s Department of Citywide Administrative Services must approve the lease before it’s finalized. [NYP] — Kathryn Brenzel