Did you know that 36% of commercial real estate tenants rent less than 2,500 square feet of office space? Another 22% rents between 2,500 and 4,999 square feet, which means that almost 60% of all commercial real estate tenants are 5,000 feet or under. Again and again, we hear that small business owners are afraid of their landlords. They think they’re in the minority, and consider themselves the itty-bitty tenants up against the big bad landlords. The statistic above proves that small businesses aren’t itty bitty – not by any means! On the contrary, they’re the ones making up the majority of the New York commercial real estate market. Small businesses are the lifeblood of New York – they’re what keeps our city’s heart pumping. Read on to hear why you’ve got no reason to fear your landlord.
Small Tenants are Grouped Together
For the most part, small tenants don’t occupy space in buildings alongside large corporate tenants. This is nothing against the small tenants; it’s simply the way it is. This is partially due to the fact that those large corporate tenants require their buildings to have a large open floor plate that is not conducive to a smaller tenant. Big corporations tend to take up multiple floors, if not whole buildings. Small tenants, on the other hand, tend to be grouped together. If you were to take a survey of New York City’s commercial buildings, you’d find that there are far more buildings that cater to smaller tenants – and that these are the tenants that make up a substantial portion of revenue for the landlords.
Small Businesses Comprise a Big Piece of the Pie
Take, for instance, 275 Madison Avenue, which sits on 40th Street and Madison Avenue. 275 Madison is comprised of smaller businesses. Such is the case in many New York buildings – there may be 60 tenants in your building, but they’re all your size. When you add up all of those tenants and the amount of space they’re renting and therefore, the amount of money they’re making the landlord, you’re looking at a substantial piece of the pie. Consider how much money your landlord would lose if you moved out, and multiply that by 60. That’s how much he’d lose if all the small tenants in your building vacated. Remember, your building is just one of many chock full of smaller businesses.
With small businesses comprising over half of today’s commercial real estate market, such tenants have nothing to fear. There’s no reason to feel as though you, as a small tenant have no power over the landlord. On the contrary, small businesses are the lifeblood of New York’s real estate; without them, many landlords would have no tenants. For every building with just a few anchor tenants, there are a dozens buildings full of small, responsible tenants. These tenants matter to landlords. So don’t be afraid to do your research and ask for a good deal. Your landlord can’t stand to lose you.
