Everyone knows how uncomfortable New York can be in the summer. The humidity, the sweat, and the sauna-esque subways. Everyone is counting down the days for the weekend or summer Fridays when they can take the first bus or train out to the beaches. Landlords, tenants, lawyers, and brokers all can finally agree that breaks from the heat are needed. Vacation days are used and little time is spent beating the pavement looking for office space.
As a result of the lower amount of time spent searching for new office space between Memorial Day and Labor Day, the market hits somewhat of a lull. Leases already in negotiation become long dragged out affairs as key players are using their vacation times (especially lawyers and landlords). This slight market slow down (inversely to the residential market that pics up in the summer) could provide a window of opportunity for tenants willing to brave the heat.
Although the market rarely adjusts to normal cyclical changes in market activity, some landlords do start to feel the heat (get it?!) in their wallets due to the high cost of vacancies due to irrecoverable rent. This is more prevalent in smaller buildings or class B and C buildings where each vacancy is a larger portion of the entire portfolio. This creates the opportunity for a tenant to negotiate a larger concession, whether it be construction or free rent, or perhaps even a slightly reduced rent from what would be possible in the non-summer months.
So, the summer in New York could be tough with the humidity and heat and the beach calling your name, but think long term of the benefits you could gain from negotiating a better deal by braving the heat.
David Goldberg – Managing Director