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Progressive workspace solution offers opportunities for New York property investment

23rd December 2015 Print

Barworks Times Square, New York is an interesting new workspace solution located in the heart of Manhattan. It is also an exciting opportunity for property investment in one of the world's major cities.

Barworks aims to conquer a gap in the market within commercial property's fastest-growing sub-sector; serviced offices and workspace units. It offers access to affordable, accessible and all-inclusive temporary workspace and work units, ideal for the USA's growing number of freelancers, single-person start-ups, and independent contractors.

A number of big-name providers offer similar workspace throughout Manhattan – collectively millions of square feet. Despite the fact that prices start at US$400 per month, which is a major expense for many new businesses especially, they are regularly fully-booked. These US$400+ price tags often also exclude even basic services such as internet access, telephone usage, and photocopying. Paying the sometimes unexpected cost of these “extra” services can easily the price by a further 50% or more, and many independent workers and small start-ups are left paying US$700 or more every month to have access to working space. These costs are easily significant enough to be the difference between success and failure for many new businesses, and to exclude many would-be entrepreneurs from accessing practical and appropriate workspace at all.

Barworks, by contrast, will offer the entrepreneurs and freelancers of Manhattan access to a much more affordable workspace solution. There will be fixed monthly fees not exceeding US$550, and these will be all-inclusive. Those using this workspace will also have access to discounted catering and entertaining facilities. With demand even for the cities expensive existing solutions running high, this will put Barworks in a strong position for success.

In order to fund the development of this innovative new commercial property investment venture, Bar Works Inc is offering an attractive package for domestic and international investors. Those who invest in the project have the opportunity to purchase ten-year leases on units within Barworks Time Square, in order to receive 50% of gross rental returns from every unit they lease. To provide investors with added security, the units made available for lease are those which will be for the use of long-term and full-time occupants, who will be paying monthly rent of US$550.

This adds up to annual gross returns of US£3,500 per unit. As the full ten-year lease of a unit costs US$25,000, resulting in net annual returns of 14% for single-unit purchasers, excluding annual rent increases. Multiple-unit purchasers will benefit from increasing returns depending on the number of leases they buy, up to a maximum level of 16.5% net. Investors will receive income payments monthly, and benefit from a guaranteed 125% buyback.

UK investors may also be drawn to the opportunity for the tax benefits. Much like the UK, the US offers a personal allowance on income arising in the country before tax starts to be applied. Currently, this allowance is US$9,500 annually, meaning that purchasing one or two leases will result in profits below the US tax threshold.