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The faltering economy is claiming victims left and right--even those glassy office towers that are perfectly positioned in Midtown. The NY Times details how tenants at 1095 Avenue of the Americas are trying to break their lease or sublease parts of their space. The building underwent a $250 million make-over to get rid of its white marble facade for a green glass one and attract big companies (MetLife, Bank of Scotland) and financial firms to pay $132/square foot. However, now MetLife and two other companies are trying to get rid of over 300,000 square feet, which would now go for $95/square foot. The Times points out that the companies are required to pay their rent if they can't find subletters, "But trouble could emerge if any of the companies tumble into bankruptcy court and stopped paying rent."
Midtown Office Tower Tenants "Rushing to Break" Leases
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When quoting commercial real estate rental prices, is the price per square foot per month? Year? Or what?
It's per year chunk.
Multiply $PSFxSF/12 and that's your monthly net rent.
^ Exactly. It's per year but it doesn't tell the whole story. Many commercial landlords will adjust lease terms depending on the markets, the quality of the tennant, and other variables. To entice a blue chip tennant, they also throw in the build-out costs, or lower the break up fee. In the end, these companies are testing the Midtown market and they might just find out that there are other firms out there that want prime space. It's not over just yet.