Businesses Get Coveted City Addresses, Virtually

Small business owners who want the cachet of a Manhattan address but can't afford the real estate prices are increasingly looking to virtual office plans, forgoing big rents for small spaces in favor of leasing a mailbox, receptionist, and conference room when needed, all for about $300 a month.

When a public relations executive, Shirar O'Connor, wanted to start her own firm, she didn't have the capital to find, furnish, and fully wire her own office, so she looked into a virtual plan. Within 24 hours, Ms. O'Connor had a Midtown Manhattan address, administrative support, and a desk should she need it.

"The Manhattan address was the logical decision for us," Ms. O'Connor, whose firm, the Pont Group, specializes in economic development, said. "All the media is based in New York."

The average price per square foot for commercial real estate in Manhattan is nearly $60, up from $44 last year at this time, according to the brokerage firm Cushman & Wakefield. Those high prices can quickly add up, forcing small businesses to think more creatively about maintaining their urban presence. As a result, firms that offer virtual office plans, such as the Regus Group, are sprouting up across the city.

"The biggest advantage for a small business is the corporate image we can provide," the group's marketing director, Terri Morgan, said. "Competition is fierce, and most of their prospective clients want the comfort that they're dealing with a credible and more established company."

It is essential for small businesses to be in New York, the president of appraisal firm Miller Samuel, Jonathan Miller, said. "There's a high concentration of your clients that would be based here," he said. "You want to attract good people to be competitive with a larger company."

The Regus Group has 950 locations worldwide in 400 cities, with 16 offices in Manhattan, among them spaces in the Chrysler Building, Rockefeller Plaza, and Penn Plaza. Packages run between $225 and $350 a month, depending on services, Ms. Morgan said.

Another virtual office provider, the Bevmax Office Centers, leases out addresses in four locations around the city. A cheery receptionist welcomes visitors, and commissioned Modern art pieces dot the corridors. Caller ID identifies who is calling for which company, and mail is forwarded daily. Bevmax's clients schedule conference room use and have full access to office amenities.

"It's a very popular option because the illusion is that nascent businesses have these very prestigious addresses," the president of Bevmax, Rick Feld, said.

Another firm, ManhattanVirtuals.com, advertises an assigned 212 area code phone number as part of its package deal. The traditional New York City code makes companies appear as if they were established in the city before 212 numbers became scarce, the firm's managing partner, Kareem El-Heneidi, said.

To Ms. O'Connor, the virtual office setup has been a "godsend." Her business cards advertise her Midtown address, even if her mail ultimately goes to her Putnam Valley home.

But the biggest advantage, Ms. O'Connor said, is the call forwarding. If she's traveling, she receives calls on her cell phone, which gives her the chance to run to a quiet spot. "The client thinks I'm in the office, focusing only on their business," she said, laughing.

Should a client visit the office, however, there is a downside: no clear indication of which company is behind the office's main door. "If you need identity, forget it," the president of Miller and Partners, Marc Miller, said. "But you still have the Manhattan address."