Real Estate Incentive Programs

New York City offers various Real Estate Incentive Programs (REIPs) to bolster business activity in select neighborhoods. These NYC Real Estate Incentive Programs substantially reduce the cost of commercial real estate acquisitions in Lower Manhattan, Harlem, Queens, Brooklyn and the Bronx.

It takes an experienced broker to find ideal spaces for your business within designated abatement zones and to determine if your business will qualify. Metro Manhattan Office Space brokers are highly experienced in helping clients benefit from NYC Real Estate Incentive Programs to ensure you’re not letting cost-saving opportunities slip through your fingers. Not only will we help you find the right property, we’ll also help you understand how an  applicable incentive program will benefit the economics of your business.

Below is a brief overview of the Real Estate Incentive Programs that are available in New York City.

LOWER MANHATTAN

Commercial Revitalization Program (CRP)

  • Cost Savings: Up to $10 per SF over five years
  • Time Frame: 3 or 5 years
  • Advantage: Reduced rent

The CRP incentive is disbursed as: (1) a property tax abatement to the landlord, which is then passed on to the commercial tenant in the form of reduced rent; and (2) a special commercial rent tax reduction whereby retailers and commercial businesses with an annual rent of over $200,000 receive an exemption on their commercial rent tax.

The abatement lasts for either three or five years, depending on the length of the lease. On a five-year lease, the CRP incentive is worth $2.50 per square foot for each of the first three years, then $1.67 in the fourth year and $0.83 in the fifth year. On a three-year lease, it is worth $2.50 per square foot during each of the three years. For commercial leases extending beyond five years, the tenant receives the CRP benefit only during the first five years of the lease.

To qualify for the CRP: (1) benefit buildings must be located in the Lower Manhattan abatement zone; (2) the property must receive a base level of capital improvement; and (3) the landlord must participate in the program.

Lower Manhattan Energy Program (LMEP)

  • Cost Savings: Electricity savings of up to 45 percent
  • Time Frame: Up to 12 years
  • Advantage: Subsidized electricity costs

The LMEP can save tenants up to $1.00 per rentable square foot (RSF) in electricity costs. Dozens of Lower Manhattan commercial buildings participate in the LMEP. The incentive takes the form of a rebate issued from the utility to the landlord, which is then disbursed to the tenant. The program lasts up to 12 years and applies to both direct leases and subleases.

To qualify for the LMEP: (1) the building must be renovated or newly built; and (2) the building must be approved by the Industrial & Commercial Abatement Program (ICAP) or the New York City Industrial Development Agency (IDA). Tenants do not need to submit an application for the LMEP. Tenants located in an eligible building will receive an energy credit.

Lower Manhattan Relocation Employment Assistance Program (LM-REAP)

  • Cost Savings: Tax credit of $3,000 per employee
  • Time Frame: Up to 12 years
  • Advantage: Credit is taken against the NYC General Corporation Tax, the Banking Corporation Tax, the Unincorporated Business Tax, and/or the Utility Tax. The amount of savings is determined by the number of employees relocated to the acquired space.

The LM-REAP provides a $3,000 tax credit per employee for companies that relocate staff to Lower Manhattan from outside New York City. This tax credit is for each job relocated or added to Lower Manhattan within five years of the initial relocation.

To qualify for the LM-REAP: (1) companies must be in business for 24 months before relocating or expanding to Lower Manhattan; (2) companies that are new to Manhattan must move at least one employee to Lower Manhattan from offices outside the city; (3) companies with a Manhattan presence that are moving employees from outside New York City to Lower Manhattan must increase their payroll in NYC by 24 percent or 250 employees; and (4) tenants can either sign a lease of at least three years and spend at least $25 per square foot on improving their space or they must spend at least 50 percent of the assessed value of the property for commercial property or 25 percent of the assessed value for industrial property.

Additionally they must locate to a property that is (a) eligible for ICIP; (b) leased from the New York City Industrial Development Agency; (c) owned by the city; or (d) leased from the Port Authority or the New York State Urban Development Corporation. The program is applicable to Lower Manhattan south of Houston Street.

MANHATTAN (NORTH OF 96TH ST.), BRONX, QUEENS & BROOKLYN

Commercial Revitalization Program (CRP)

  • Cost Savings: Up to $10 per SF over five years
  • Time Frame: 3 or 5 years
  • Advantage: Reduced rent

All rules for the Commercial Revitalization Program in Lower Manhattan outlined apply.

Energy Cost Savings Program (ECSP)

  • Cost Savings: Electricity savings of up to 45 percent
  • Time Frame: Up to 12 years
  • Advantage: Subsidized electricity costs

The ECSP is similar to the Lower Manhattan Energy Program (LMEP). See details above.

Relocation and Employment Assistance Program (REAP)

  • Cost Savings: Tax credit of $3,000 per employee
  • Time Frame: Up to 12 years
  • Advantage: Reduced net effective rent, the amount of savings is determined by the number of employees relocated to the acquired space.

REAP is a sister program of LM-REAP. REAP provides a $3,000 tax credit per employee for companies that relocate staff to The Bronx, Queens, Brooklyn or Manhattan, north of 96th Street. The relocation must be from Manhattan, south of 96th Street or north of Canal Street, or from outside New York City. This tax credit is for each job relocated or added to The Bronx, Queens, Brooklyn or Manhattan within five years of the initial relocation. The duration of the credit is 12 years. To be eligible, companies must be in business for 24 months before relocating and must either purchase a property or sign a lease with at least a three-year term.

Metro Manhattan Office Space has been helping tenants benefit from NYC Real Estate Incentive Programs for over seven years. Contact Principal Broker Alan Rosinsky for a free consultation at 212-447-5403. 

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