Left to right: Hurley, Skanska; Blount (moderator), Colliers; Kass, ESRT and Shapiro, Oxford.
NEW YORK CITY—'Creative office' is a term that's generated buzz for some time. But what qualifies? Is it a mix of amenities? Are aesthetics the key? Or do area attractions put a space over the top?
Three industry professionals who may have found the secret sauce, or are working to strike the right balance in their offerings, revealed the answer last week during presentations at the CREW Network national conference, which was held in Midtown Manhattan.
One of the developers behind the nation's largest-ever private project, Hudson Yards—a mixed-use complex here including office space, residential buildings, retail and cultural offerings—spoke of the work by his firm and the Related Cos. to “ build the city of the future.”
“We're putting in technology loops and building our own power plants, creating a city that never will go down, even if the entire Northeast power grid goes out,” noted Dean Shapiro, SVP, Oxford Properties Group.
“We've given a lot of thought to efficient floor plates, inter-floor travel that minimizes travel time within the building and more,” he continued. “The project allows us to build a neighborhood and work to make this equally attractive to various constituents.”
Shapiro elaborated, “We wanted to provide access to transportation and the 7 train came online. People who want to can go outside every day in our outdoor space, attend shows at the Culture Shed—a venue being developed as part of the complex—eat at one of our 11 restaurants, visit the High Line and more. Tenants are attracted to Hudson Yards because of its ability to attract and retain employees.”
Meanwhile, Ryan Kass, SVP, director of leasing and marketing at Empire State Realty Trust, spoke of the efforts by his firm—a REIT—to turn the iconic Empire State Building into an “urban campus.”
“The building was operating as an office building, tourist attraction and broadcast center; it was necessary to implement changes over time as we could gain control of spaces through reworking leases and implement building upgrades,” he said.
At the three-million-square-foot property, ESRT added the city's largest tenant-only fitness center; a tenant-only conference center; “a white-cloth restaurant for people to entertain clients in two to three times a week—with private executive dining and event space”; additional dining and food options and other tenant services.
The transformation has been profitable for the company, Kass later shared with GlobeSt.com. “We have gone from more than 750 small suites rented to low credit tenants, at low rents, to a first-class office building with larger, better credit tenants on longer leases—at starting rents typically more than 50% higher than expiring, fully escalated rents.”
Skanska implemented some creativity out in Seattle. Its 2+U mixed-use tower is set to feature 665,000 square feet of office space literally lifted above 18,500 square feet of retail and 30,000 square feet of open public space.
“We decided to lift the building because we realized we could offer more than just an office space,” explained Shawn Hurley, president and CEO, Skanska USA Commercial Development. “It was the right solution to tie together the CBD, the arts community and all of the cultural assets Downtown.”
The firm also is looking to the future of office development, he added. “At 2+U, we partnered with Microsoft to create the first-ever, mixed-reality leasing experience. The platform provides a holographic tour of the project, bringing it to life so you can experience the office space and the views of the Puget Sound from the roof deck, or virtually walk through the spaces.”
Still, Hurley said, amenities are marketing gold. “Offering amenities like a concierge, valet, bike service stations, a tenant deck and yoga studios is the premium you need to create the value people want.”
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