Manhattan Office Tenants Chase Outdoor Space
Office floors with a private terrace generate higher premiums, roughly 14% over non-terrace floors.
NEW YORK CITY- Manhattan office tenants are prioritizing outdoor space at the top of their amenity list, and landlords are taking note as they dedicate portions of their building to outdoor single-floor terraces and landscaped rooftops to accommodate the demand.
The desire for outdoor space did not spring up overnight. New construction and development have fueled this trend, with 79% of Manhattan office buildings built since 2010 or under construction featuring outdoor space, according to a recent CBRE Manhattan Market Flash report.
While newer properties have outdoor space incorporated in their blueprint, existing landlords are leveraging outdoor space to lure potential tenants, upgrading setbacks and vacant rooftops into roof decks and garden terraces, which is incorporated into their capital improvement efforts, according to Nicole LaRusso, CBRE’s director of research & analysis for tri-state, and author of the report.
“Office-dwellers love being able to go outside – year-round – and landlords are eager to provide this amenity,” LaRusso tells GlobeSt.
There is a significant payoff for outdoor space that is not only in high demand but uncommon. Only 27% of Manhattan office buildings offer outdoor space, and with the high demand layered on top of limited supply, office floors with a private terrace generate higher premiums, roughly 14% over non-terrace floors.