By Barbra Murray
Knotel, a fast-growing provider of custom office space, continues to increase its footprint in New York with the completion of transactions at four office buildings across Manhattan. The company signed four new leases and lease expansions, adding a total of 31,973 square feet to its flexible workspace offerings.
The flurry of leases, Knotel notes, is in direct response to a growing demand in the office sector. “Owing to a more competitive business environment, companies no longer want to take the risk of entering into a long-term lease obligation,” Eugene Lee, global head of real estate & business development at Knotel, told Commercial Property Executive. “Companies want to be free to grow and change and have a real estate solution that can adapt to changing conditions.”
Knotel added a new full-floor location to its stable, with the inking of a lease agreement with Winter Properties for 9,979 square feet at 26 West 17th St. The flexible workspace company relied on Elie Reiss of Skylight Leasing for representation in the lease, while Newmark Knight Frank’s Eric Cagner, Greg Wang and Matt Sigel stood in for Winter. Moreover, Knotel now has offerings at 90 John St., where the company entered into a lease agreement for 4,673 square feet with property owner Moinian Group. Neither Knotel nor Moinian used outside representation on the transaction.
At two of its existing locations, Knotel responded to a cry for more space by signing lease expansions. The company increased its occupancy at AR Global’s 200 W. 41st St. with the addition 8,780 square feet of the building, bringing its total offerings at the property to 35,120 square feet. Knotel was represented in the deal by Savills Studley’s John Mambrino, Gabe Marans and Jordan Weiss. AR Global was represented by Eric Cagner of Newmark Knight Frank, the commercial real estate services firm that recently made a strategic investment in Knotel. Knotel took on more square footage at 5-9 Union Square West as well, leasing an additional 8,541 square feet to bring its total presence at the property to 32,016 square feet. Knotel turned to Michael Morris and Greg DiGioia of NKF for representation in the transaction, and landlord Square West was represented internally.
The four new transactions follow a series of other Knotel lease agreements in Manhattan this year, including one for 23,000 square feet of space at 31 W. 27th St. in a deal with property owner Savanna.
Formed in 2016, Knotel already provides approximately 1.4 million square feet of flexible workspace in New York and San Francisco, as well as abroad in London and Berlin. And there’s more to come, as the company is in growth mode. Knotel recently hosted a kick-off event in Berlin, with leaders from roughly 50 local startups and established companies in advance of announcements of new locations in the city. And the great expansion is continuing in New York, where the company is announcing several deals a week. “By the end of next year there will be hundreds of Knotel locations all over the world,” Lee said.
Knotel’s mushrooming presence can be justified by the numbers. According to a report by commercial real estate services firm Cushman & Wakefield, while flexible workspace presently accounts for 1 percent of the total office inventory in the U.S., the figure is expected to jump to between 5 percent and 10 percent of inventory in many markets in the foreseeable future.
There are a host of advantages that will continue to make the flexible workspace sector attractive to office users, according to Knotel. “Dealing with real estate is also extremely time consuming and requires several different service providers—brokers, lawyers, architects, contractors, etcetera. With Knotel, it’s the ‘easy button’ for real estate. We handle it all: it’s your office, your brand, your terms,” Lee added. “We plan on being in every major city, globally, within the next couple of years. If it’s a high-density city with a lot of entrepreneurial activity, we will be there.”
Images courtesy of Knotel