A Classic Loft Story

The building at 5 West 19th Street was converted to a commercial coop in the early 80’s. Converting buildings to coop back then was very popular, more so in residential buildings, but still, in a few commercial buildings. I don’t know how many commercial coop buildings there are exactly, but it’s less than 1% of the overall total of office buildings in NYC. These conversions afforded small business owners the opportunity to control their future in a way they couldn’t have otherwise and some industries gravitated toward them more than others. Photographers were one group that seemed to buy these coops (printers were another) probably because they typically needed larger open spaces and would pioneer in areas that tended to evolve from downtrodden to fashionable where they were constantly getting priced out.

By buying, they could control their destiny.

This worked well for many years and the photographers at 5 West 19th Street prospered.  What they couldn’t have known was the sea-change that would occur when digital photography caused the cost of a photograph to plummet, leading many photographers to have to change their business models. One of the changes was that a large studio space would become a luxury.

The lucky few who had purchased their space at 5 West 19th Street have been able to convert what might have been a burden into a valuable asset: a large loft floor in a very fashionable area of Manhattan that many companies were eager to occupy.

I’ve been fortunate to represent several of these photographers throughout the years and I have one now. In the accompanying picture, you can see the  gorgeous wood floor, windows on all sides, and generous column spacing.  It’s a classic loft in every sense of the word.  

Power and Control

I took a class in college called “Power in American Society” which was taught by a real old-guard lefty. The subject of the class was how power is retained and how it is transferred, either legitimately or illegitimately.

This particular professor would get so worked up about the subject of the powerlessness of some oppressed group (in those days Central America was a big sore spot) he would turn red and literally get spitting mad. He died of a heart attack about a year after I took the class. No big surprise.

Real estate transactions are all about the transfer of power and control and any real estate transaction can come to seem like a power struggle where both parties fear being abused and some people react by getting spitting mad.  In a tenant’s market, as it was for a few years after 2008 tenants were the scarce commodity and had all the power. Today the pendulum has swung back hard the other way and landlords are asking more and offering less.

This isn’t such a bad thing because it means the economic pulse of the city has quickened.

But it also doesn’t mean tenants have lost all control, it just means that the control lies in giving yourself options.  Here are some suggestions:

First, start early, be flexible and ready to devote resources to the problem.  If you find a space that’s perfect, but you have to take it earlier than you might like, negotiate hard for enough free rent to cover any overlap, but be ready to pay double rent if the space is worth it.

Second, keep looking, even when you think a deal is done.

Third, have a back up plan in mind.  This may be extending your current lease or being prepared to take an alternate choice.

Fourth, be realistic about how much things cost. In a landlord’s market, they may ask unrealistic rents, but they have the expectation that in a market this crowded, somebody might be willing to pay it.

Flexibility and options are the best way to end up with a good outcome at the end of the day.