Touring an empty office space on West 40th Street, David Menaged is hoping the office listing will help his company corner what he sees as a growing segment of the commercial real estate market.
“The flexible nature of short-term rentals is that you want spaces to be habitable and in a form that’s as ready to go as possible,” Menaged, founder and CEO of Trot, a platform designed to allow companies to connect directly to building owners said.
The Midtown space is available for a three-month lease and it’s one of several you’ll find on the platform, which is being marketed as an Air BNB of sorts for commercial listings. It’s also called flexible leasing. The website is launching when the city’s commercial market is still in recovery and vacancies remain high.
“For a while there’ve been a bunch of predictions, and I think COVID put the idea of short-term rental on steroids, but it has been something that’s been important and increasingly more important,” Menaged said.
According to the real estate data firm Lee and Associates, Manhattan availability is up 62% from pre-pandemic levels. In Midtown, nearly 18% of commercial space remains available, compared to 12% in 2019. Despite those figures, David Levy of Adams & Company Real Estate, which owns several Midtown buildings, is optimistic about Manhattan real estate.
“Business is decent and to say that it’s in free fall wrong. It’s certainly not [a] boom situation, but it’s stable and strong,” Levy said.
He’s also interested to see if the platform will prove to be a better way to handle short-term leasing.
“It’s not where we put our faith in a WeWork or a Notel or any of those type of coworking tenants,” he said. “In this situation we have an opportunity to view the tenants [and] look at them.”
For his part Menaged, is excited about the possibility. He notes that the current system of relying on brokers to market short-term rentals is flawed because it demands as much work as longer leases without the financial payoff.
“Some projections have flex taking up as much as 30% of the market within the next ten years, so with any luck we’ll have a few thousand buildings on Trot,” he said.