New York City has been struggling to balance the interests of residential landlords and tenants for a while — and landlords have been struggling with rent controls. Now, commercial landlords also have a reason not to be happy with a new proposal from the New York City Council that many consider “anti-business.”
The proposal would create a new board that would then have the power to set rental guidelines for commercial properties, similar to the way things are done for residential rents. Commercial landlords say that the plan is unfeasible and that the issue of an individual property’s rent is far too complex for a board to manage. They also feel that the market currently is managing itself just fine.
As one owner/broker pointed out, “No two pieces of space are the same.” Some of the factors that go into the price of a commercial rent include:
- Neighborhood type
- The amount of storefront
- Co-tenancy issues
- Layout and street access for deliveries
- Upper floors, lower floors and subbasement space
- How space is to be used
- Outdoor space that can be used
- Window size
- Work needed to make the space useful
- Condition of the building
- Concessions the owner will make
- Storage space
- Venting
- Elevator size or escalators
- Ease of entry for the public
And that’s really just the start of the list. Owners are extremely anxious about the proposal. One even stated, “It’s terrifying. It is New York City adopting an anti-business agenda that would create a sense of political risk and discourage investment.”
In uncertain times, it’s always wisest to have experienced legal advice if you’re investing in commercial real estate or negotiating a lease.