Commercial landlords chopping up space

As commercial vacancy rates rise and smaller deals become more popular in the city, some developers are splitting large empty blocks of space into smaller offices and “prebuilding” them, finishing off the space before finding a tenant. Bill Rudin, president of Rudin Management Company, said at 355 Lexington Avenue, a 16,000-square-foot space is being split up and prebuilt into offices of 2,700 to 6,900 square feet, and Rudin might do the same at 55 Broad Street. “In the past, landlords would have been less likely to break up whole floors, because it is easier to do one single transaction,” Peter Turchin, an executive vice president at CB Richard Ellis, said. “But that’s not where the market is now.” Almost 85 percent of the leases signed in Manhattan during the first quarter were offices under 10,000 square feet, according to Cushman & Wakefield.