Cresa | When the Lights Go Out 

1140 Sixth Avenue has windows running along its entire north side. By 2029, many of them will be looking at a 400-room hotel going up on the vacant lot next door at 1150 Sixth. For the tenants on the floors below the new building’s height, the light and views they signed up for have an expiration date that wasn’t in their lease.

That’s the lesson this month kept reinforcing for me: light and views are among the things companies value most in their space, but nothing guarantees they’ll last as long as your lease does.

I saw the other end of this story on a recent trip to Fort Lauderdale, touring office space for a client. In many of the 16 buildings downtown, space that once had water views and great natural light now looks out at apartment towers and hotels. South Florida’s growth has been good for the city, but it has quietly taken something away from tenants who assumed their views would stay put. It’s a preview of what happens when nobody asks the question up front.

Some of this can’t be prevented, but it can be anticipated. When you’re evaluating space, look past the window to what’s next door. Is the neighboring lot vacant or built well below what zoning allows? Could the owner acquire air rights to build higher? Are permits already filed with the Department of Buildings? Where the risk is real, there are ways to protect yourself, such as choosing floors above what can be built next door, or negotiating a shorter term or an early termination option. This is part of the diligence I do for every client, because paying premium rent for a view you lose two years into a ten-year lease is an expensive surprise.

The title has a second meaning this month. Recent interest rate increases will likely slow the next wave of new development. That may spare some existing windows, but in a supply-constrained Midtown, it also means bright, high-floor space will keep getting scarcer and more expensive. Midtown vacancy is already at its lowest level in more than five years, and fewer new buildings will only push it lower. Which is all the more reason to know, before you sign, whether the light you’re paying for will last.

Author: Gregg Cohen Principal CRESA

Compliments of Cresa – A member of the EACCNY