Maybe this is a bit simplistic in thinking but why do they not just advertise two entries; 1) The usable space & 2) The apportionment of the shared space/amenities. Thank you for your videos Alan, I have no interest in renting anything in the USA but I find the intricacies of your profession & the NY real estate market intriguing. Have a safe & happy holiday period and all the best to you & yours for 2020.
Thanks for your comment Ken! Short of new laws regulating how commercial space is marketed, I don't see any incentive for landlords to change the existing manner in which they measure and market office space. The New York City real estate industry has a very effective lobby, so reform in this area seems unlikely for the moment. What you are suggesting does makes perfect sense. Tenants can bypass this issue by measuring a space and dividing the annual rent by the net square footage to obtain a cost per useable square foot. It takes a bit for time but it is an easy fix for a problem that is very upsetting to tenants in New York City.
A landlord knows or ought to know the usable area. What I suspect is happening is that it's in the landlord's best interest to have a somewhat opaque market. If a tenant can't compare you on price, then maybe you can increase price over commodity and charm them when they inevitably visit to find out the ground truth.
In terms of charming a tenant, you would be amazed how frequently perspective tenants do not measure a space. Sometimes they really like the building, the location, amenities and the layout and they just don't measure.
@@MetroManhattanOfficeSpace I've used a handheld laser to triangulate large factory floors for structural and plant layouts for the purpose of determining new equipment placement for automation. Trust me - a laser is far faster and more convenient - you can measure to things you can't actually reach. iforce.co.nz/i/angpfvuk.u4c.jpg
Hi, it is easy to advertise it in clear terms: "You rent x% of a y square feet building, so a total of z square feet including your part of common areas. Your useable private area would be n square feet approximately". See it is easier to compare and it would also speak about how cramped the public areas would be, it could include some other useful information. You can even specify an approximate loss factor and any other minor (or bigger) detail. That honesty could be a selling point.
The lighting is on point! It's honestly quite impressive how you got the hang of this over what seems like overnight. Also in terms of content you're doing a great job: Videos are straight to the point, not rambly, and cover interesting topics with a clear focus. Keep up the great work and happy a 2020!
Simple fix. NY City requires laws to force landlords to provide the exact usable space being rented, the exact commons space that you will have access to, and the price that they will pay for each. The tenant will then know exactly how much space that they will have, the price for it, and the rest is amenities, which everyone applies different values to. TBH, I don’t know how landlords in New York City aren’t charged with fraud for doing this.
This would be a reasonable solution. Does not appear that any politicians have focused in on this is surprising considering how upsetting it is to local businesses. I do my best to inform my clients concerning loss factors of potential space.
it's not lying it's comercial real estate. what I don't understand is that in France for istance we pay rent for the exact size then you have fees for the building management.
2:45 - Thank you, Alan. Although I'm not in the market for a space in Manhattan, the solution you provide to make financial sense of the cost factor idea is a perfect solution. Also, thank you for giving us a great explanation and justification for the cost factor concept in your other videos. Keep up the informative and quite intriguing content. I'm glad Louis encouraged you to spend more time sharing your knowledge and growing your channel. I expect there are a lot of beneficiaries to this material out there.
Why don't spaces for rent come with floorplans (on scale with the lenghts of walls mentioned)? I have to look for various spaces (with various reasons) quite regularly and over here, I generally don't even consider to check out spaces if the listing doesn't come with floorplans. Here it's so standard nowadays that listing without them usually turn out to be 'clickbait', being real dumps with the strangest layouts
2:50 exactly! Why not just allocate the calculated price for the common areas into the rent tennants pay rather than add to the area. Obviously a higher sqf price for my office is worth it for me as a tennant if I have access to a big fancy lobby with sofas, and elevator vestibules with watercoolers, green plants and whatnot. Then I know beforehand what I'm dealing with, instead of setting up a meeting only to afterwards be disappointed that it's 30% smaller than I thought and the price is not really a bargain at all. "Remind me not to do business with this landlord ever again" kind of thing. A bit self destructing if you ask me. Too bad everybody is doing it. Hard to get off the hamster wheel... [edit] And also telling what the common areas are, how they would serve you, to justify the higher price.
This is only finding workaround the issue not a fix. The problem is landlords who should separate the advertising space with the cost of rent and simply add a loss factor into rent cost rather than increasing space artificially.
I think a lot of things in life can be like this unfortunately, the best thing you can do is just try to educate yourself, or find someone you trust help inform you of things like this. If I buy a 120GB SSD on amazon, will I get 120GB of storage space? No, I won't. I'll lose some space to formatting, and to the operating system. Searching tells me that windows 10 64bit takes up 20GB of storage space, and the amount used by formatting can vary depending on the file system, and the size of the hard drive. I have a 32GB android phone. Android 10 system files take up 10GB of space. Native applications take 3.4GB of space, and I'm also losing some space due to formatting. So am I really getting 32GB of storage space? No, I'm only getting about half of that. Even though I'm not really into tech these days, I'm aware of this loss that comes with formatting a storage device, and the loss that occurs from necessary things like an operating system, and I accept it. To someone that doesn't know anything about tech, they might be furious to know that their 32GB phone has less than 18GB of storage capacity, or that their flash drive isn't actually a full 32GB or 64GB. Does the documentation these days warn about that? I don't know, it could be hidden somewhere in the fine print, but I know the box for my ssd doesn't say anything.
I just saw a headline last week; seems the Danish government will do something about this. To make it clear how the area size are to be presented; so everybody knows what the different terms mean.
Yea I still think this should have died out long ago but unfortunately commercial vs residential .... commercial always seems the wild wild west in terms of rules and conditions. I go to buy a house or rent an apartment, they get that right down to the nearest square... 842 sq-ft/78.25 sq-m. Commercial they're rounding up whole floors. Sad state of affairs. I feel that if I can't put my desk, my chair, even a row of holiday lights in an area, the sq-ft/sq-m shouldn't count toward my leasing and shouldn't be advertised. Feel that one of the "next big ideas" would be the sign saying "2000 sq ft, no loss factor!" The only reason it's still in use is because it's accepted practice, and the only reason it's accepted practice is because people still use it. It'll take a bold move to break that. And if they continue to do it, they'll do it to the wrong person who'll go to City Hall, make a stink and there will be a law regulating it. Merry Christmas and Happy Hanukkah, and best 2020 wishes to everyone.
this concept of "loss factor" is such an ass backwards system that only some marketing genius could come up with such a system pure confusion/obfuscation to hide the true price just give usable area and its cost, easy and clear to everybody but nope, need to try to put on some imaginary floor space 💴
I don't disagree with you. Tenants need to understand this when they search for potential space. As long as they understand they need to divide the annual rent by the net square footage they will be able to compare "apples" to "apples" to determine the best value.
I'm sorry, but this is just unnecessary. Just advertise the usable space or give an exact figure for the loss factor applied to a space and no one has to run around with a tape measure.
Doesn't NYC have a good Costar database? In Phoenix and Los Angeles we used Costar so we knew USF/RSF beforehand. Loius's comment section on the video with Karen continues to collect comments from an angry mob. Someone level headed ought to explain who is qualified (and even licensed) to measure spaces and determine load factor. Sure measuring tools are helpful, but agents don't take on that liability. That is what architects and drawings are for. I'm getting the impression NYC doesn't have good databases of floor plans and measurements...?
I think the concept of a loss-factor is confusing because it is a LIE. If I ask for 2000sf of usable space - I ask for 2000sf space, not 1850, nor 1473! What if we would agree for 1000$ rent, yet I'd be transferring only 800$? Why cant you say - this 2000sf space share 5% of building costs, or 5% extra per foot due to common area related to your usage? Wouldn't that be fair? If one think hiding the 'extra cost' in the square area that you rent is ok, one should be clarified that it is CHEATING. Comparing orange to apples - there should be 2 numbers: 1) a square foot price 2) shared-space-building cost - defined as: $ per square foot, OR as a % of a space Then you know: Building A: cost per foot is 70$, shared-cost 5$ - total cost 75$ per square foot. Building B: cost per foot is 50$, shared-cost 30$ - total cost 80$ per square foot. Building C: cost per foot is 50$, shared-cost 5% - total cost 52.5$ per square foot. That simple - as long as one does not LIE about real usable space.
Maybe this is a bit simplistic in thinking but why do they not just advertise two entries; 1) The usable space & 2) The apportionment of the shared space/amenities. Thank you for your videos Alan, I have no interest in renting anything in the USA but I find the intricacies of your profession & the NY real estate market intriguing. Have a safe & happy holiday period and all the best to you & yours for 2020.
Thanks for your comment Ken!
Short of new laws regulating how commercial space is marketed, I don't see any incentive for landlords to change the existing manner in which they measure and market office space. The New York City real estate industry has a very effective lobby, so reform in this area seems unlikely for the moment. What you are suggesting does makes perfect sense.
Tenants can bypass this issue by measuring a space and dividing the annual rent by the net square footage to obtain a cost per useable square foot. It takes a bit for time but it is an easy fix for a problem that is very upsetting to tenants in New York City.
A landlord knows or ought to know the usable area. What I suspect is happening is that it's in the landlord's best interest to have a somewhat opaque market. If a tenant can't compare you on price, then maybe you can increase price over commodity and charm them when they inevitably visit to find out the ground truth.
In terms of charming a tenant, you would be amazed how frequently perspective tenants do not measure a space. Sometimes they really like the building, the location, amenities and the layout and they just don't measure.
Merry festivus - this is where we conduct the airing of grievances about loss factor
Lighting looks great 👍
Get up, walk around, use your hands, be expressive :) Even though I have nothing to do with that area, I find this really interesting, keep it up !!!
Merry Christmas Alan! (and every one else here too!)
Mic quality is phenomenal. Thank you, Alan. Best wishes and happy holidays!
Very informative, use a botch laser.
*Bosch
I really should try a laser. But somehow, I have much more confidence in a tape measurer. There is just not the slightest doubt on the accuracy.
@@MetroManhattanOfficeSpace I've used a handheld laser to triangulate large factory floors for structural and plant layouts for the purpose of determining new equipment placement for automation. Trust me - a laser is far faster and more convenient - you can measure to things you can't actually reach.
iforce.co.nz/i/angpfvuk.u4c.jpg
Hi, it is easy to advertise it in clear terms: "You rent x% of a y square feet building, so a total of z square feet including your part of common areas. Your useable private area would be n square feet approximately". See it is easier to compare and it would also speak about how cramped the public areas would be, it could include some other useful information. You can even specify an approximate loss factor and any other minor (or bigger) detail. That honesty could be a selling point.
The lighting is on point! It's honestly quite impressive how you got the hang of this over what seems like overnight. Also in terms of content you're doing a great job: Videos are straight to the point, not rambly, and cover interesting topics with a clear focus. Keep up the great work and happy a 2020!
Simple fix. NY City requires laws to force landlords to provide the exact usable space being rented, the exact commons space that you will have access to, and the price that they will pay for each. The tenant will then know exactly how much space that they will have, the price for it, and the rest is amenities, which everyone applies different values to.
TBH, I don’t know how landlords in New York City aren’t charged with fraud for doing this.
This would be a reasonable solution. Does not appear that any politicians have focused in on this is surprising considering how upsetting it is to local businesses.
I do my best to inform my clients concerning loss factors of potential space.
It's not lying, it's commercial real estate!
Hi Alan happy Christmas and new year - thank you for all the videos
it's not lying it's comercial real estate.
what I don't understand is that in France for istance we pay rent for the exact size then you have fees for the building management.
I hope you’re having a good weekend, Alan.
2:45 - Thank you, Alan. Although I'm not in the market for a space in Manhattan, the solution you provide to make financial sense of the cost factor idea is a perfect solution. Also, thank you for giving us a great explanation and justification for the cost factor concept in your other videos. Keep up the informative and quite intriguing content. I'm glad Louis encouraged you to spend more time sharing your knowledge and growing your channel. I expect there are a lot of beneficiaries to this material out there.
Why don't spaces for rent come with floorplans (on scale with the lenghts of walls mentioned)? I have to look for various spaces (with various reasons) quite regularly and over here, I generally don't even consider to check out spaces if the listing doesn't come with floorplans. Here it's so standard nowadays that listing without them usually turn out to be 'clickbait', being real dumps with the strangest layouts
Good afternoon, Alan!
2:50 exactly! Why not just allocate the calculated price for the common areas into the rent tennants pay rather than add to the area. Obviously a higher sqf price for my office is worth it for me as a tennant if I have access to a big fancy lobby with sofas, and elevator vestibules with watercoolers, green plants and whatnot. Then I know beforehand what I'm dealing with, instead of setting up a meeting only to afterwards be disappointed that it's 30% smaller than I thought and the price is not really a bargain at all. "Remind me not to do business with this landlord ever again" kind of thing. A bit self destructing if you ask me. Too bad everybody is doing it. Hard to get off the hamster wheel...
[edit] And also telling what the common areas are, how they would serve you, to justify the higher price.
Hi Alan. Merry Christmas
Informative
This is only finding workaround the issue not a fix. The problem is landlords who should separate the advertising space with the cost of rent and simply add a loss factor into rent cost rather than increasing space artificially.
I think a lot of things in life can be like this unfortunately, the best thing you can do is just try to educate yourself, or find someone you trust help inform you of things like this.
If I buy a 120GB SSD on amazon, will I get 120GB of storage space? No, I won't. I'll lose some space to formatting, and to the operating system. Searching tells me that windows 10 64bit takes up 20GB of storage space, and the amount used by formatting can vary depending on the file system, and the size of the hard drive.
I have a 32GB android phone. Android 10 system files take up 10GB of space. Native applications take 3.4GB of space, and I'm also losing some space due to formatting. So am I really getting 32GB of storage space? No, I'm only getting about half of that.
Even though I'm not really into tech these days, I'm aware of this loss that comes with formatting a storage device, and the loss that occurs from necessary things like an operating system, and I accept it. To someone that doesn't know anything about tech, they might be furious to know that their 32GB phone has less than 18GB of storage capacity, or that their flash drive isn't actually a full 32GB or 64GB. Does the documentation these days warn about that? I don't know, it could be hidden somewhere in the fine print, but I know the box for my ssd doesn't say anything.
I just saw a headline last week; seems the Danish government will do something about this. To make it clear how the area size are to be presented; so everybody knows what the different terms mean.
Wow, in pretty much every other developed country, this would be illegal and tantamount to false advertising. No wonder Rossman was pissed.
What you’re describing is add-on factor or load factor. Loss is actually slightly different.
Yea I still think this should have died out long ago but unfortunately commercial vs residential .... commercial always seems the wild wild west in terms of rules and conditions. I go to buy a house or rent an apartment, they get that right down to the nearest square... 842 sq-ft/78.25 sq-m. Commercial they're rounding up whole floors. Sad state of affairs.
I feel that if I can't put my desk, my chair, even a row of holiday lights in an area, the sq-ft/sq-m shouldn't count toward my leasing and shouldn't be advertised.
Feel that one of the "next big ideas" would be the sign saying "2000 sq ft, no loss factor!" The only reason it's still in use is because it's accepted practice, and the only reason it's accepted practice is because people still use it. It'll take a bold move to break that. And if they continue to do it, they'll do it to the wrong person who'll go to City Hall, make a stink and there will be a law regulating it.
Merry Christmas and Happy Hanukkah, and best 2020 wishes to everyone.
✌🏻
Happy Solstice.
this concept of "loss factor" is such an ass backwards system that only some marketing genius could come up with such a system
pure confusion/obfuscation to hide the true price
just give usable area and its cost, easy and clear to everybody
but nope, need to try to put on some imaginary floor space 💴
I don't disagree with you. Tenants need to understand this when they search for potential space. As long as they understand they need to divide the annual rent by the net square footage they will be able to compare "apples" to "apples" to determine the best value.
I'm sorry, but this is just unnecessary. Just advertise the usable space or give an exact figure for the loss factor applied to a space and no one has to run around with a tape measure.
Yeah, "there ought be a law." In the meantime, just do what Alan says.
Doesn't NYC have a good Costar database? In Phoenix and Los Angeles we used Costar so we knew USF/RSF beforehand. Loius's comment section on the video with Karen continues to collect comments from an angry mob. Someone level headed ought to explain who is qualified (and even licensed) to measure spaces and determine load factor.
Sure measuring tools are helpful, but agents don't take on that liability. That is what architects and drawings are for. I'm getting the impression NYC doesn't have good databases of floor plans and measurements...?
Why did you talk about a tape to measure when you can do it electronically? Louis has a device that does it in a minute.
I think the concept of a loss-factor is confusing because it is a LIE.
If I ask for 2000sf of usable space - I ask for 2000sf space, not 1850, nor 1473!
What if we would agree for 1000$ rent, yet I'd be transferring only 800$?
Why cant you say - this 2000sf space share 5% of building costs, or 5% extra per foot due to common area related to your usage?
Wouldn't that be fair?
If one think hiding the 'extra cost' in the square area that you rent is ok, one should be clarified that it is CHEATING.
Comparing orange to apples - there should be 2 numbers:
1) a square foot price
2) shared-space-building cost - defined as: $ per square foot, OR as a % of a space
Then you know:
Building A: cost per foot is 70$, shared-cost 5$ - total cost 75$ per square foot.
Building B: cost per foot is 50$, shared-cost 30$ - total cost 80$ per square foot.
Building C: cost per foot is 50$, shared-cost 5% - total cost 52.5$ per square foot.
That simple - as long as one does not LIE about real usable space.
It's not lying, it's commercial real estate.