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NYC Real Estate

Tips for Commercial Leasing in NYC

Contact Person

When seeking a commercial rental, you will primarily be dealing with one of three people: the Property Owner, a Management Company, or a Real Estate Broker. From the get-go, it is a good idea to clarify exactly who the main contact is, as there are different fee implications depending on with whom you are dealing. RE Brokers are required by law to disclose they are the Broker representing the property. It should also be clear from the advertisement. However, since this is not always the case, if you are not sure whether you are dealing with a Broker, we recommend asking directly.

In Commercial Rentals, the RE Broker often collects their fee from the Property Owner or Management Company. However, this is not always the case. We recommend, as always, that you request disclosure regarding any applicable fees BEFORE viewing the property. It is also best to confirm the fee structure (or lack of one) in an email or writing, to keep for confirmation in case of surprise fees later.

As with Residential Rentals, there is often a Credit Check and/or Application Fee, usually for a nominal amount, around $50 - $100 for each.

Commercial Rental prices are often displayed as Price/Foot. This actually means: Price/Foot/Year.

So if a 500SF commercial space has an asking rent of $40/SF:
$40 x 500SF = $20,000/year divided by 12 months = $1667.67/month

Commercial Leases sometimes include additional monthly charges for Trash Removal, Water Usage, and other utilities. We recommend that you inquire about these charges prior to receiving the lease, as they can factor into the total monthly rent.

Commercial Leases often include a Rent escalation. This refers to an annual increase in rent for the duration of the lease to allow for general inflation, and increased building expenses. This is frequently in the range of 3-5%, but can vary from building to building.

In Commercial leases there is sometimes a difference between 'Total SF' and 'Usable SF'. If a commercial space is pricing out at more square feet than is actually allocated to the unit there is a Loss Factor included. The Loss Factor, sometimes called "Common Charges," refers to space outside the actual unit, such as hallways, stairwells, elevators, etc, that is not actually inside the space, but also utilized by tenants. Loss Factor/Common Charges are calculated and priced out in various ways according to the building.

• Explanation of Business Concept
• Personal and Professional References
• Proof of Incorporation(INC)/Organization(LLC)
• Legal Photo ID: Passport, Driver's License, etc
• Tax Returns (usually last year's, but sometimes last two years)
• Company Financial Statement: Asset/Liabilities sheet, usually drawn up by CPA
• Company Bank Statements and/or Reference Letter
• Credit Check (personal and business)