Real Estate Incentive Programs

The City of New York offers various incentive programs to bolster business activity in select neighborhoods. These incentives 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 with helping clients benefit from 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 the applicable incentive program will benefit the economics of your business. 

Below is a brief overview of the incentive programs that are available in New York City. 

LOWER MANHATTAN

Commercial Revitalization Program (CRP)

• Cost Savings: Up to ten dollars 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 through to the commercial tenant in the form of reduced rent and (2) a commercial rent tax special reduction whereby retailers and commercial businesses with an annual rent of over $200,000 receive an exemption on 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 $.83 in the final 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 during the first five years of the lease. 

To qualify for 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%

• Time Frame: Up to 12 years

• Advantage: Subsidized electricity costs

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

To qualify for LMEP: (1) the building must be renovated or newly built and (2) the building has been 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 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.

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 5 years of the initial relocation. 

To qualify for 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% 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% of the assessed value of the property for commercial property or 25% of the assessed value for industrial property. Additionally they must locate to a property (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 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 ten dollars per SF over five years

• Time Frame: 3 or 5 years

• Advantage: Reduced rent

See "Commercial Revitalization Program" above that is applicable to Lower Manhattan.

Energy Cost Savings Program (ECSP)

• Cost Savings: Electricity savings of up to 45%

• Time Frame: Up to 12 years

• Advantage: Subsidized electricity costs

Very similar to the Lower Manhattan Energy Program (LMEP). See "LMEP" 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 to LMREAP. 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 5 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.

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Metro Manhattan Office Space has been helping tenants benefit from New York City incentive programs for over 7 years. Finding your ideal location is only the first step, we then help ensure that you’re benefiting from all the cost-saving opportunities that are available to you. We know that avoiding excessive costs can mean the difference between success and failure in your business.  

Contact Alan Rosinsky, Principal Broker of Metro Manhattan Office Space, Inc., for a FREE consultation today: (212) 447-5403.