NYC prebuilt office spaces on the rise
New York City prebuilt office spaces, built by a landlord before leasing as opposed to being commissioned by a tenant, are evolving into a crucial part of building sales strategy and attracting higher-end clients, according to the New York Times. Companies that don’t have the time, resources or patience to go through a construction process are moving straight in to these sophisticated spaces.
Developers are looking to cash in. Cohen Brothers Realty has prebuilt 100,000 square feet in the last five years and is working on an additional 50,000 square feet. RFR Realty recently prebuilt the entire second floor of 17 State Street. And RXR Realty is prebuilding nearly half of the empty space at 340 Madison Avenue and up to 20 percent at 1330 Sixth Avenue. Some of these projects, including prebuilts by Rudin Management, are going green as an added bonus, featuring recycled drywall and bamboo cabinetry.
Prebuilding is not inexpensive for landlords. Scott Spector of the Spector Group, an architect-led design company that has worked with companies on prebuilts, estimates it costs around $60 to $85 per square foot to finish a prebuilt.
RXR’s prebuilt at 1130 Sixth Avenue cost up to $120 per square foot, said the New York Times. The company is wooing hedge funds to make up costs.
Tenants building their own office space would pay 10 to 20 percent more than those estimates, Spector said. [NYT]