From the October issue: WeWork, Regus and other temporary office firms continue to snap up space in Manhattan, but there are still traditional landlords concentrating on leasing to small tenants.
“There is a lively market for small space. As a matter of fact, sometimes we have a big space and divide it in two,” said Phillipe Ifrah, president of IGS Realty. His firm owns a Garment District building divided into dozens of spaces. He said small companies that start in shared office spaces often migrate to their spaces once they have expanded to a handful of employees. “When they grow, they come to us,” Ifrah said. In addition, small tenants come knocking when they want to create their own identity. A TRD analysis of CoStar Group data for leases of 1,000 square feet or less signed this year show the bulk are inked in the $40- to $60-per-foot range.
Another active specialty market is medical leasing, both on ground floors and upper levels of buildings. Michael Dubin, a partner at brokerage Savitt Partners, said the action was driven by several market factors, including new state and federal laws and consolidation. That leads large firms to restructure their leases. At the same time, many independent doctors are moving from co-op buildings into multi-specialty practices in professional buildings. “A ton is going on in health care,” Dubin said. “There is a tremendous amount of adjustment in the medical space.”