Generally speaking, the high profile and more expensive buildings in New York won’t allow medical tenants. Others will allow dentists and therapists, but draw the line at anything that involves blood. Because medical tenants are not as sought after as your typical law or investment firm you’ll need to find medical space in the less high profile and more offbeat buildings. Unfortunately, this doesn’t necessarily mean that those looking for medical space will get cheap rent – on the contrary, because there’s a demand for medical spaces and not so much supply (what with the limited supply of buildings and the increased build-out costs), the rates can be higher than a typical office tenant would pay.

Here are a few things you should know:

• When a landlord is willing to accept medical tenants, he’s pretty much guaranteeing himself tenants and higher rents. Medical tenants tend to clump together, as this makes for easier referrals, and since landlords know this, they can artificially inflate their rent prices.
• Landlords may opt not to have medical tenants because of the amount of upkeep they cause. Medical offices mean a lot of foot traffic, higher build-out costs, clogged elevators, and more cleaning to be done. Many landlords don’t want the added trouble.
• As stated above, a lot of landlords don’t take medical tenants but a good broker will know who does and who doesn’t and will be able to navigate this on your behalf. Thanks to the current economic landscape, more landlords are opening themselves up to medical tenants just to fill their buildings. Three years ago, when the market was at a high, it was much harder to find a landlord willing to take in medical tenants.
• Many medical people would prefer to own their own spaces. Unfortunately, 99% of commercial real estate in Manhattan is not for sale! Doctors love commercial condos but they can be very expensive.

What it comes down to is this: if you’re looking to rent medical space, find yourself a top-notch tenant representative real estate broker as looking for medical space can be a challenge.

1. 4 Times Square – Known as the Condé Nast Building, 4 Times Square is an eco-friendly modern skyscraper in Midtown. The major office space tenants in 4 Times Square are composed of Condé and Skadden, Arps, the wealthiest law firm in the United States. The building stretches 48 stories high, making it the 12^th tallest building in New York City.

2. 825 Eighth Avenue – Also known as One Worldwide Plaza, 825 Eighth Avenue is part of a three-building, mixed-use commercial and residential complex. One Worldwide Plaza is the commercial component, stretching 49 stories high. The building has three separate entrances meant to accommodate the various commercial tenants in the building, which formerly included international advertising agency Ogilvy & Mather. Currently, 825 Eighth Avenue is home to the law firm of Cravath, Swaine and Moore, who occupy 600,000 square feet of space.

3. 1155 Avenue of the Americas – Home to the North American offices of law firm White & Case, 1155 Avenue of the Americas is a 40-story skyscraper designed by Emery Roth. It’s home to 400 White & Case lawyers, and it’s been the home of the firm for many years.

4. 450 Lexington Avenue – Home to law firm Davis Polk, 450 Lexington Avenue stretches above Grand Central Terminal, boasting 40 stories. Built over the historic Grand Central Station Post Office, the building makes a strong statement on an important Midtown Manhattan site while still remaining true to the architectural details of its base. Davis Polk currently leases 650,000 square feet at 450 Lexington Avenue.

5. 140 Broadway – Of course, you cannot neglect downtown Manhattan, where the space is cheap and the views are just so-so. Located between Liberty and Cedar Streets in the Financial District, 140 Broadway is a 52 story, 1.2 million square foot office space tower. Law firm Chang & Boos currently calls 140 Broadway home.

1. 660 Madison Avenue – Located above Barneys New York, 660 Madison is a 13 story, Class A office building on the western side of Madison Avenue. It’s one of the most highly sought after properties in Midtown, with great access to public transit, shopping, hotels and restaurants, and of course, views of Central Park.

2. 667 Madison Avenue – Located at 61^st Street, 667 Madison Avenue is an extremely fancy building with the feel of a five star boutique hotel.  It stretches 25 stories into the sky; its stone detailing recalls some of New York’s greatest 1920s buildings. 667 Madison also offers great views of the park, and boasts triple height storefront windows that revolutionized retail display in New York.

3. 767 Fifth Avenue – Known as the General Motors Building, 767 Fifth Avenue is also home to the coolest Apple Store around. The famous building faces both the Plaza Hotel and sits caddy corner to Bergdorf Goodman, and stretches 50 stories high. Together with the distinctive towers of the Sherry Netherlands and the Pierre hotels, 767 Fifth Avenue makes up an integral part of the New York City skyline.

4. 9 West 57^th Street – Also known as the Solow building, 9 West 57^th Street offers the best views in the city. It sits next to the Plaza Hotel and Bergdorf Goodman; its 50 stories compete in height only with the General Motors building located one block northeast. 9 West 57^th Street boasts well-known tenants such as Chanel, as well as hedge funders like Och-Ziff Capital Management and Highbridge Capital Management. The building features some of the most expensive rents in the city, thanks to its unobstructed views of Central Park.

5. 712 Fifth Avenue – Located above Henri Bendel on Fifth Avenue at 56^th Street, 712 Fifth Avenue is the 53^rd tallest building in New York City, with 52 stories.  The building boasts one of the most interesting facades in the city, with large decorative patterns, large square windows, and truncated banding; it works hard to dissolve the traditional office building image. Tenants on the upper floors of 712 Fifth Avenue have great views of upper Fifth Avenue and Central Park.

Green is most certainly the new black – and everyone who can afford to go green is doing so. Note: the key phrase in that sentence is “everyone who can afford to go green” – that’s right, folks, going green can be pretty expensive, especially when it’s commercial real estate that you’re talking about. Below, we highlight some things you need to understand about green buildings – and what LEED certification means for you.

First and foremost: What is LEED Certification?

1. LEED Certification isThe Leadership in Energy and Environmental Design (LEED) Green Building Rating System, which was developed by the U.S. Green Building Council(USGBC)
2. There are four different levels of LEED certification (certified, silver, gold, and platinum).
3. Buildings that aim for LEED certification build their properties based on the tenants of the LEED rating system – these include the use of recycled material, reducing the amount of waste leaving a job site, using sustainable building material, and utilizing low-emitting materials.
4. Buildings who have followed the above guidelines can then submit an application for LEED certification.
5. Applications are reviewed by The Green Building Council and if accepted, are awarded one of the above levels.
6. Utilizing sustainable materials and building according to the LEED guidelines isn’t cheap.
7. There are also fees associated with applying for LEED certification

That being said, here are some things to know:

1. Most of the green buildings here in New York City tend to be new construction, and tend to be very expensive. As emphasized above, it’s expensive to build a sustainable building, and expensive to apply for and obtain LEED certification.
2. A green building = a higher price per square foot. It costs the landlord money to put the green elements in; therefore, you’re going to pay more when it comes to rent.
3. 75-80% of the buildings in New York are 80 years or older, thanks to the building boom that followed The Great Depression. These buildings aren’t at all eco-friendly. Landlords have taken measures to make them greener, such as adding new windows, but there’s only so much that can be accomplished by retrofitting.
4. Virtually every landlord is talking about going green, but few can afford to walk the walk. Consider this: a landlord would have to evacuate his tenants to make any large changes on an old building. No landlord is going to kick out tenants just to retrofit his space and make it more expensive.
5. As of now, renting in a green building won’t save you as the tenant any money – in fact, it’ll cost you more.

Wondering why any of this is important? Most people think that carbon footprint we’re creating is thanks to transportation. They’re wrong. Buildings give off 2/3 of the carbon emission in the world, whereas transportation only makes up 1/3. In short, even though going green is expensive, we can’t afford not to.

Given that most commercial real estate leases are upwards of 70 pages long, it’s easy to miss a few details here and there. That’s why it’s generally advised that you hire a tenant representative broker, as he/she will be trained to look out for the important parts of the legal jargon. However, whether you’re planning on utilizing the services of a tenant representative or not, there are a few hidden costs you should keep your eyes out for when scanning your new lease.

1. Electricity: Make sure you read the fine print when it comes to electricity in your new office space, because all contracts are written to try and confuse tenants (this works in the landlord’s favor). If you’re not careful, the number that you’re quoted could go up as much as 100% in a 5 year period. For example, on the day you move in, you could be paying $3.50/square foot for a 5,000 square foot space. This adds up to $20,000 a year for electricity. However, in most cases, landlords have clauses written into their leases that allow them to “survey” your space and then up your rate.

• A common practice is for the landlord to send in an electrical surveyor who will look at all your office equipment and make calculations presuming that everything is running full tilt 24/7.  This trick is called assessing electrical usage based on “connected load” as opposed to “demand load” or what you actually use.
• So even though you’re starting out at just $3.50/square foot, you could easily be forced to pay significantly more as early as the second month of your lease.

2. Freight Elevator Time: When you move into your new building, you can’t just lug those desks up the normal passenger elevator. You’re required to use the freight elevator, and unfortunately, this happens after business hours. This means that any moving has to be done after 5PM or on weekends. If you’re not careful, your landlord may charge you for the usage of the freight elevator, as well as for a union guard to be present.

• You could be looking at $500/hour to move in, and considering that moving an entire office space is going to take many hours, usage of the elevator quickly adds up.
• Tenants often don’t think they can negotiate the price or usage of the freight elevator. You heard it here first: you can negotiate just about anything. Make sure you talk to your landlord about using the freight elevator and perhaps, not being charged for doing so.

3. Light bulbs/Miscellaneous Maintenance: If you don’t read your lease carefully, your landlord might just include a cause that dictates that only their workers can change the light bulbs in your office space. That means they could potentially charge you $100 every time a light burns out. It sounds ridiculous, but if you don’t have it written into your lease that you, as the tenant, have the ability to change your own light bulbs, you’re looking at racking up them dollar signs pretty quickly.

4. Real Estate Taxes: We’ve touched on this before, but it’s of utmost importance to figure out how the real estate taxes in your building are being billed. You need to understand what will happen to you and your rent if the taxes of your building go out, and how those sorts of figures are calculated.

• In short, what is fair is that you pay a proportionate share of the real estate taxes above a base year.  What does this mean?  Let’s say the total real estate tax on a building this year is $1,000 and you have one of ten floors (10%).  Your base year should be equivalent to $1,000.
• In year 1, you don’t pay anything (remember you only pay your share above the base).  The next year the total real estate taxes go up $100 to $1,100.  You are responsible for 10% of the $100 increase or ten bucks.  Of course it’s impossible to know for sure what taxes will be going forward.  A reasonable estimate of what it will actually cost you (in NYC) is 35 cents per year starting in year two.

5. Preexisting Condition Clause: Most leases have a clause that states that when you move out of your office space, you must deliver it back to the landlord in its preexisting condition. That means all those walls you paid to put up must come down. All that specific task lighting you had installed must be uninstalled. That vibrant paint must be returned to builder’s beige. These sorts of expenses are negotiable, but don’t count them out – the more work you do, the more you could be paying to undo in the coming years.

In short, make sure you or your tenant representative broker read every last word of that lease, because if you’re not careful, you’ll end up paying out the ear for things you didn’t anticipate paying a dime for.

Back when the market was good, price per square foot wasn’t nearly as negotiable as it is now. What with the economy being pretty beat up, landlords are eager and sometimes desperate to fill their buildings – often at a much lower price than they would have offered a few years ago. In NYC for example, prices have dropped over 40% in the last 18 months.  Commercial space is usually priced by the square foot and figured by the year; $20 a square foot, for example, means $20 per square foot per year. Though it’s less likely, space is sometimes priced by the month; $1.60 a square foot would mean $1.60 per square foot per month, or $18 a square foot figured yearly. Either way, it’s sensible to check out rates for comparable spaces and ask for a reduction.

v Your negotiating power depends on whether your local rental market is hot or cold. If plenty of commercial space is available, you can probably win many landlord concessions. If your area’s rental market is tight or you are after a unique space, you’ll have considerably less leverage.

v Tenants are looking at potentially negotiating a savings of up to 20% off of the asking price, and in some cases, even more. Whether you’re considering a new lease, or renewing your current one, you definitely have wiggle room. If you’ve got a tenant representative broker on your side, you’ll do even better. Negotiating is part of the game, especially when you’re playing multiple buildings against one another.

v The more “must haves” you require, the less negotiating room you have. Know what you’d like versus what you must have – views are nice, but does it have to be of Central Park from every window? The smaller your list of “must-haves” is, the more negotiating power you’ll have.

v  Know what concessions landlords are giving in other spaces or buildings similar to the one you’re looking at.  For example, if a landlord is offering a full build out worth $50/s.f. and you can live with the existing condition of the build out, ask for that $50/s.f. in additional free rent.  You might just get it.

v It costs a lot of money for a landlord to lose an existing tenant.  What’s a lot?  12-18 months of lost rental revenue.  Sometimes more.  When tenants fully understand their value to a landlord, they get more concessions.  Often a lot more.

The lessons to be learned here:

• In this market, if you’re renewing a lease or looking for a new one, the odds are in your favor more than you think. Hire a tenant representative and a good commercial real estate attorney, and start saving money.
• The concept of negotiating price per square foot is entirely dependent on the market. Right now, the odds are in the favor of the tenant thanks to the recession, but it wasn’t like this before and it’s likely that it won’t stay like this forever. Take advantage of your negotiation opportunities while you can!

Say you are a tenant and your business fails. You vacate your office space and give it back to the landlord. This makes you a “good guy.” You have behaved yourself, the Landlord can re-let the space and if there are assets left in the corporation the Landlord is free to go after them. But so long as you are a “good guy” and vacate your space, the Landlord has no further recourse against you personally and cannot pierce the protection of the corporate veil.

However, if after a business failure, you stop paying rent and refuse to leave your space, therefore forcing your landlord to evict you (something that often takes a year or more), then you are a bad guy. Under the terms of the Good Guy Guarantee, the landlord can now go after you personally.

From a landlord’s perspective a Good Guy Guarantee is an insurance policy against the amount of time it can take to evict a tenant. This legal process can take over a year, and during that time, the landlord can’t rent the space or recoup any of its losses.

Hence, it’s common for landlords to require tenants to sign a Good Guy Guarantee. It is a mode of financial and legal protection for the landlord. It also makes staying in an unpaid space extremely unappealing to the tenant.

A Good Guy Guarantee is not a blanket personal guarantee. Instead, it should be looked at as a promise (with some teeth to it) that the tenant will return space to the landlord of the tenant’s business fails, enabling the landlord to find a new tenant to pay rent.

A Good Guy Guarantee isn’t necessarily onerous to the tenant. If worded properly, it’s a reasonable legal document. This being said, tenants should make sure that they check the wording of their Good Guy Guarantee with a figurative microscope. Often, landlords will add language that creates an additional liability for the tenant. A common tactic is for landlords to try and capture an additional 3-6 months of rent payment from the signatory of the Good Guy. They do this by wording the Good Guy Guarantee in a way that requires the tenant to give 3-6 months notice if they plan to vacate. As tenants are rarely able to provide such notice in a dire business situation, such an insertion works in favor of the landlord and against the tenant.

Two other scenarios to be particularly aware of are – one is if you sublet your rented space, and the other is if your company is sold. In the case of a sublet, should your sub-tenant decide to be a bad guy, and not vacate the space when the lease is up, the landlord is going to look to you, personally, until the sub-tenant is out.  The same is true if your company is sold. Even if another entity or individual acquires your company over the course of your lease, your name is still on the Good Guy and as such it’s you are responsible should things go wrong.

Depending on the credit worthiness of a tenant, the state of the market, and the needs of the landlord, these clauses can be negotiated out or mitigated, so make sure you don’t just sign your name without making sure you are crystal clear what you are getting into.