| Who is likely to buy it? |
User buyers — businesses, owner-operators, institutions looking to occupy |
Investors — buyers looking for income and yield |
| How is it priced? |
Based on what a user will pay for occupancy rights — often above investor value. In Midtown and Downtown Manhattan, the user premium has reached up to 200% where zoning allows significant use flexibility |
Based on cap rate applied to current net operating income |
| Does a below-market lease hurt? |
N/A — no tenant to worry about |
Yes — a below-market lease reduces NOI and therefore investor value |
| Speed of sale |
Can be faster — user buyers are often motivated by lease expiration deadlines |
Depends on lease terms, tenant credit, and investor demand at that yield |
| Is this pattern unique to NYC? |
Yes — most U.S. markets penalize vacancy; Manhattan's deep user buyer pool inverts this |
Standard logic applies in most markets: occupied equals more valuable |
| Seller preparation required |
Deliver clean and vacant with a clear certificate of occupancy |
Provide clean rent roll, lease abstracts, and operating expense history |
| What size buildings does this apply to? |
Primarily under 100,000 SF — the range where user buyers are most active |
Less size-sensitive — investors buy at all scales |
