Since the recession a little over a decade ago, NY property investors have been trying to find ways to be more flexible with their offerings, and get the most out of their occupancy to maximize revenue. The result, which coincided with the rising “sharing economy,” was fractional leasing. But what is fractional leasing and is it actually viable in NYC’s current commercial property market?
What Is Fractional Leasing?
Fractional leasing is a method by which property owners set up shared office space for businesses. In the past, we have discussed hybrid working spaces, where businesses in disparate industries will work side by side in the same buildings, and sometimes on the same floor. Fractional leasing is similar but takes a much more granular approach. Fractional leasing makes use of that unoccupied corner office, even if it’s just used by one person or a small team for a completely different company from the one renting out the main space. The younger members of the workforce who have a firmer grasp on the shared economy have no problem with hybrid workspaces or fractional leasing, so long as they have a place to complete their tasks and hold meetings.
Renovating for Fractional Leasing Spaces
NY property investors should be pleased that office space in a shared economy does not need much renovation. For hybrid offices, not everything needs to be taken into account and furnished. The important part is that the space can accommodate any changes by the businesses and individuals leasing. Some NY property investors take a minimalist approach to renovations, but add more turn-key services on the premises, such as a game room or a gym – something low-maintenance but also an amenity that will attract tenants.
Is Fractional Leasing Viable for the Long-Term?
When one looks at the sheer growth of shared workspaces throughout NYC, fractional leasing has yet to hit its peak. Even with larger businesses like Google making inroads to New York, the workforce is still too diverse and we probably will not see major consolidation as we did prior to the recession. The fractional leasing market is still hot and still growing, and NY investors are taking advantage of the opportunities it presents to increase their bottom line.
Express Capital Financing specializes in funding solution for NY property investors. If you are looking to acquire an office building or get an existing property ready for fractional leasing agreements, contact the experts at Express Capital Financing today.