MIDTOWN | 390 BUILDINGS | 246.5 MSF
AVERAGE ASKING RENT: $89.45 AVAILABILITY RATE: 11.5%
MIDTOWN SOUTH | 305 BUILDINGS | 77.8 MSF
AVERAGE ASKING RENT: $83.56 AVAILABILITY RATE: 9.0%
DOWNTOWN | 120 BUILDINGS | 89.9 MSF
AVERAGE ASKING RENT: $62.34 AVAILABILITY RATE: 11.8%
CHELSEA
$84.82 | 9.3%
HUDSON SQ/ TRIBECA
$88.94 | 7.0 %
PARK AVE SOUTH/ MADISON SQ
$69.04 | 10.3%
NOHO/ SOHO
$92.07 | 10.7%
FLATIRON
$79.74 | 6.0%
UNION SQ
$104.23 | 13.1%
EAST SIDE
$70.35 | 11.5%
SIXTH AVE/ ROCKEFELLER
$79.59 | 9.5%
PARK AVE
$111.55 | 9.7%
FIFTH AVE/ MADISON AVE
$117.06 | 16.5%
GRAND CENTRAL
$89.58 | 11.6%
PLAZA
$105.92 | 18.9%
TIMES SQ/ WEST SIDE
$82.32 | 11.5%
TIMES SQ SOUTH
$64.23 | 12.2%
PENN PLAZA
$90.80 | 10.4%
CITY HALL
$60.27 | 8.9%
FINANCIAL
$58.45 | 12.1%
DOWNTOWN WEST
$72.28 | 13.0%
MARKET OVERVIEW
MAHATTAN OVERALL
PROCESS METHODOLOGY
THE REAL ESTATE PROCESS
01.
02.
03.
STRATEGIC PLANNING
OPTION DEVELOPMENT
TRANSACTION IMPLEMENTATION
Abstract leases, including lease rights Remaining lease obligation analysis Building stack plans Questionnaire/Interview summaries Demographics Market updates Scenario planning Space programming
DELIVERABLES:
Tour books Space surveys TIM/Comps reports Qualitative matrix Cash and P&L analysis Proposal comparison RFPs/Term sheet
Lease Status reports Issues lists Final documentation
NEGOTIATION & STRUCTURING
DOCUMENTATION
SITE SELECTION/EVALUATION
SITUATION ANALYSIS
CRITERIA DEVELOPMENT
STRATEGY SELECTION
Scenario Planning Financial Analysis
Existing Real Estate Evaluation Needs Assessment Market Analysis
HIDDEN ECONOMICS
RENT
CONCESSIONS
OPTIONS
LANDLORD SERVICES
OPERATING EXPENSES
SUBLET & ASSIGNMENTS
REAL ESTATE TAXES
ELECTRICITY
MISCELLANEOUS
Renewal Expansion Contraction
Delivery condition Work allowance Base building work Work letter Free rent Offset rights
Loss factor Net vs. gross Commencement date Rent Financing CRT
Definition Tenant's share Audit rights
Definition Share Protection Payment Certiorari rights
Insurance Alterations Restoration Repairs Signage Security
Compliance Subordination Rent abatement Defaults Use clause Roof space
Cleaning Security Hours HVAC Elevators
Landlord's consent Recapture rights Sublease profits
Basis Capacity Meters Rate
OPERATIONAL
QUALITATIVE
Cash, Tax and Accouting Implications Unique Reporting Constraints and/or Requirements Capital Requirements
Unamortized Costs Other Occupancy Costs Municiple Incentives Overtime HVAC
Current & Future Space Standards Initial & Future Space Requirement/ Existing & Projected Headcount Min/Max Floor Size Space Efficiency
Adjacencies Expansion/Contraction Needs Renewal Options Code Compliance Electrical
Technology/Infrastructure Communications HVAC Floor Load
Window Module Core Configuration Ceiling Height Hazardous Materials
Location Building Class Accessibility by Employees Quality of Ownership
Area Amenities Employee Security Building Services/Amenities Vertical Transportation
Accessibility by Visitors Proximity to Other Organizations Views/Light & Air Parking
Image/Signage Air Quality LEED
SCENARIO PLANNING
RENT RENEWAL PRICING | UNDERSTANDIG THE GAME CAN WIN THE GAME
LANDLORD'S SUPERIOR POSITION
MISTAKES MADE BY TENANT
TENANTS CAN WIN NEGOTIATION
Better field intelligence/market knowledge Veteran of similar battles Appreciates tenant's "inertia" to stay and real cost of moving Knows organizational review and approval process and timetables Understands precisely its "indifference rent" in evaluating tenant's proposal renewal
Signing the same lease Relying on "relationship" with landlord Allowing landlord to dictate negotiation timetable
Tenant must develop convincing alternatives Make landlord aware of tenant's pursuite of alternatives Shift market risk by putting landlord in market to search for new tenant Carefully craft and develop dissatisfaction strategy Expose landlord's lease up cost and market risk Use timing to tenants advantage
RENEW VS. RELOCATE: PROS AND CONS
RENEW
RELOCATE
Avoid business interruption Capital preservation Lease term flexibility
Mark to market rent increase of approximately 31% above current fully escalated rent In-place renovations may be disruptive
PROS
CONS
Newly built space Reevaluate space standards Potential to reduce cost and/or improve quality of building and space
Capital intensive Possible business interruption Longer term likely required
ENGAGING EARLY: PROS AND CONS
PROS TO ENGAGING EARLY
REASONS TO WAIT
Potential to secure tenant improvement allowance (or free rent) now Determine the best desl terms achievable and decide if the benefits outweigh the risks (negotiations are non-binding) With multiple floors expiring, the first deal will be the most aggressive The market is moving in the landlord's favor Avoid competition for your space
Lack of credible relocation threat Reveal desire to renew—potentially hinder future leverage Landlord will be more aggressive closer to expiration/imminent vacancy Space is currently functional
OPTION SELECTION
VIABLE OCCUPANCY SCENARIOS ARE SHAPED BY
Long-term headcount growth Optimal long-term footprint Capital requirements Number of desired locations Timing
EXPAND/ CONSOLIDATE
SPLIT OPERATION
Evaluate leverage, if any, afforded by existing lease rights Determine condition and timing of expansion space (i.e. does it meet needs?) Consider "blend and extend" strategy to obtain greatest concession for long-term deal or consider short-term expansion to existing LXD Perform analysis to rank scenarios from financial and operational perspective
Identify building today to accommodate entire office footprint and provides for future expansion options to grow in the future At a minimum, identifying credible relocation alternatives will create leverage with current landlord
House some functions in current building and others at alternative location Evaluate space efficiencies/cost savings to be realized (if any) from split operation Use split operation as a means to manage space risks over time
THE CBRE ADVANTAGE
INDUSTRY-LEADING RESEARCH
VALUE OF SUPERIOR MARKET INFORMATION
CBRE Research has the largest dedicated research staff in NYC totalling 19 members Tracking more than 30,000 tenants in NYC Facilitates junior brookers canvassing initiative encompassing review of 900 building stack plans per year Team confirms an average of 1,500 comps per year for our proprietary system CBRE NY Research tracks the market monthly, bucking the industry-standard quarterly updates Publishes short thought pieces to capitalize on trending topics in the market (i.e. coworking, floor plate size, TI allowance) Has a repository of recurring project slides to analyze the market's top trends creating a best-in-class system to support brokers needs quickly and accurately
EARLY AWARENESS OF OPPORTUNITIES ABILITY TO PRE-EMPT COMPETITION FOR SPACE ABILITY TO INFULENCE PRICING METHODOLOGY KNOWLEDGE OF SPECTRUM OF RIGHTS AVAILABLE TO LARGE-SPACE USERS BARGAINING POWER INSIGHTS INTO THE AGENDA AND DECISION PROCESSES OF LANDLORDS AND PUBLIC OFFICIALS
THE RIGHT FIRM, THE RIGHT TEAM
Tenant rep team with unparalleled real-time
to support project team with marketing, research, technology and services that support the lifecycle of ownership
market share and access to
to off-market/shadow space
CBRE’s capital markets team to gain insight into landlord’s underwriting
lending unique visibility to their ‘hot button’ issues when structuring transactions
WHAT WE BRING
37%
market intelligence
Fortune 200 company with world class resources
Sector-leading
best-in-class
vendors
Early access
Ability to leverage
Working relationship with all important owners,
CBRE
15% C&W
14% JLL
12% NKF
9% Savills Studley
13% Other
CBRE HAS THE IN TENANT REP AND LANDLORD REP ANNUALLY SINCE 2002
#1 MARKET SHARE
MANHATTAN
Tenant Representation 2014-2018 >10,000 SF