Rent the Runway’s splashy Dumbo office space has hit the sublease market.
The company, which rents out designer dresses on a short-term basis, decided to shutter most of its retail stores when Covid struck. It’s now also giving up its office digs at Triangle Assets’ 10 Jay Street, adding over 80,000 square feet of prime space to a market already teeming with sublet space.
Triangle Assets gut-renovated the former 221,500-square-foot warehouse that sits along the East River esplanade and waterfront. It has a striking glass curtain wall providing sweeping views of sunsets over Manhattan’s skyline.
Rent the Runway signed up for its space last May and the furniture was just delivered last week, said Ira Schuman of Savills, who is co-broking the sublet with colleague Stephan Steiner. Its spread includes a 10th-floor penthouse of just over 12,000 square feet that includes a wraparound terrace, as well as over 70,000 square feet on the seventh, eighth, and ninth floors.
Floors eight through 10 are available for immediate occupancy, according to Savills, while the seventh floor, with about 23,600 square feet can be leased starting in 2022 due to other subleases. The entire space can be rented through March 2027 with an option to extend through 2032.
“This virus made them understand what they can do from home,” said Steiner. The company still has its offices at 345 Hudson Street in Manhattan but most of the staff is working from home, Steiner said.
As The Real Deal reported in August, with live events at a standstill due to stay-at-home regulations, the retailer decided to convert to an online only model with its retail shop at 30 West 15th Street becoming a permanent drop-off/return only location.
Sublet space is becoming a big headache for landlords with direct space to list, as it’s generally provided at a significant discount. According to Colliers, sublet inventory now accounts for 23 percent of Manhattan’s total availability and is the highest since 2010.
According to a newsletter from sublet specialist, Ruth Colp-Haber of Wharton Properties, “sublet space offered by non-real estate companies in need of immediate cash flow is now available at discounts of up to 50% or more from pre-Covid levels in some instances.”
Another fashion firm, Hugo Boss, has listed its nearly 70,000 square feet at 55 Water Street on the other side of the East River with an asking rent of $59 per foot through December 2031, Colp-Haber’s newsletter said. It is being offered through another Savills leasing team.
Rent the Runway agreed to pay in the mid-$70s per foot when it signed last year.