The house party is ending for many office-bound workers — and, as a result, the office experience is getting a lot more fun.
The push to get workers back to their desks resulted in a so-called “flight to quality” — tenants demanding highly amenitized, Class A office spaces. In response, landlords upped the ante like never before.
“If you have a cool location and cool building you will get the tech guys,” observed Jeff Gural, chairman of GFP Real Estate.
Like other owners, Gural is creating new lobbies in properties like 200 Varick St., 322 and 505 Eighth Ave. and converting some elevators to fast destination dispatching.
Every morning, a worker’s swipe into the buildings also creates an entry for the nearly weekly drawings for ducats to owner suites at concerts and football games.
Through an app, yoga classes, fitness facilities, conference centers, golf simulators and video game rooms are shared by tenants in RXR’s nearby properties.
“They want those moments to leave the office and decompress, or to work with colleagues and have team building,” said William Elder, managing director of RXR’s city portfolio. Both RXR’s 5 Times Square and the Starrett-Lehigh Building at 601 W. 26th St. are also getting new amenities and fitness facilities.
On the next block, the Terminal Warehouse, at 261 11th Ave., is being entirely redone and re-massed with glass penthouses on top with views of the Hudson River across the West Side Highway.
“Now we’re making it an experience like the Chelsea Market meets Hudson Yards,” said David Lapidus, a partner with L+L Holding, one of the developers. “It’s an entire city block.”
The Terminal Warehouse’s 1.2 million square feet is being designed to accommodate a whole building’s worth of tenants in four blocks of roughly 350,000 square feet each. If the demand requires, it can host up to eight different firms — and each block has private elevators, lobbies and outdoor space.
Amenities include a public auditorium, shopping, restaurants, childcare, a dog care, “cool” bike lounges and gym showers.
“You want to do the best product you can in the best circumstances,” said Lapidus. “Developers who have capability and connectivity especially in construction and leasing will have opportunities going forwards.”
In Midtown, the Milsteins have added 150,000 square feet of amenities at 335 Madison Ave.
“The lobby is like a Four Seasons,” said Jeff Peck, vice chairman of Savills, noting that there’s a food hall and a bar that’s only for tenants during the day but opens to the public in the evening. “It’s done very elegantly.”
H.J. Kalikow & Co .recently leased a 30,000-square-foot space at 101 Park Ave. to Fire Iron Golf that will be located on its third floor and provide an amenity for the tenants who also have an event and club space.
At the Empire State Building, additional amenities include a lounge, two pickleball courts, a basketball court and two “Esrtee Virtual Golf” simulators plus stadium-like (but comfortable) seating that can handle a teams meeting for 400 people.
A tri-level Starbucks Reserve with a restaurant, cocktails and “coffee experiences” is finally open there, as well. The building already had tenants-only conference areas, a fitness facility and private dining. The new 23,000 square feet of amenities is “absolutely beautiful,” said owner Anthony Malkin, CEO of Empire State Realty Trust.
“It’s part of the whole escalation of amenities,” he said. “Businesses told people they have to come back and they recognize the businesses that stayed at work have accomplished more and were more productive — and those that did not are having challenges.”
In Brooklyn, brokers say the borough’s tallest office building, 1 Willoughby Square is a “standout” new construction Class A development that has high ceilings, is adjacent to a new city park and is steadily leasing up.
RXR also has an adaptive reuse office project in the Wallabout area of Brooklyn at a former printing plant at 47 Hall St. known as the Hall, which is seeking tenants for 674,000 square feet and will include curated retail and amenity experiences.
In the Fifth Avenue portion of Midtown South, several buildings are being reinvented to snare tenants. At 295 Fifth Ave., Tribeca Investment Group, PGIM and Meadow Partners gut-renovated the 700,000 square feet adding elevator banks, and floors of glass penthouses to top out at 19 floors.
It has a hospitality-infused, plant-filled lobby, with amenity and sanctuary spaces including a private garden plus rare, unfinished vintage wooden floors for the lobby and elevator cabs.
“We bought it from a 120-year-old building and reclaimed it,” said Peter Turchin, a vice chairman of CBRE who is overseeing leasing of the offices. “It’s a great adaptive reuse and the work force will appreciate it. We just put the plants in and they are amazing,” he added. Rents there range from $90 to $135 per foot.
A former department store at 122 Fifth is also being reinvented by the Bromley Companies with Microsoft leasing 150,000 square feet.
Boston Properties is also gut-renovating the 430,000-square-foot 360 Park Ave. South. “There’s a robust market for this kind of building,” Turchin said.
Tishman Speyer’s jumbo 200 Park Ave., right next to Grand Central, has “hit it out of the park,” with its conference center and outdoor space, said Farmakis.
Another standout is RFR’s Seagram Building at 375 Park Ave., which previously just touted its architectural pedigree. Now it has an amenity center, basketball court and outdoor space. The nearby Lever House, at 390 Park Ave., is getting a total refresh by WatermanCLARK with new trees, planted terraces and indoor and outdoor amenity spaces overlooking Park Avenue.
Michael Philips, president of Jamestown, believes “quality space” really means a place your employee wants to go to and can include a lot of different products and building types. “Office environments will have to figure out how to create more welcoming experiences,” he added.
Jamie Katcher, managing director and head of the New York office for Raise, a real estate technology and brokerage firm said, “The ones that didn’t need to put in amenities because of the demand in the market … now need to think about it.”
Rudin Management is installing a beautiful lobby and new amenity center at 80 Pine and adding outdoor space wherever they can.
Rudin is also building a new 285,606-square-foot boutique office building at 415 Madison Ave. on the site of the family’s very first office building. It will have the northernmost connection to the Long Island Rail Road’s East Side Access plus great terraces and loggias in the corners of double-height floors.
“The trends you saw in the residential market with amenitizing and outdoor space, you are now seeing in new office development,” said Mehul J. Patel, senior vice president and head of commercial office at Rudin.
Article Published By – New York Post
Article Written By: Lois Weiss