The flight to quality trend in office has remained the theme — with that specifically the case across New York State.
Stark Office Suites, which provides flexible office space to over 1,500 businesses, has been a beneficiary of that trend. According to the company's first-quarter data, office licensing activity surged by 36 percent year-over-year. Plus, the amount was 43 percent above its five-year first-quarter average.
Adam J. Stark, founder and CEO of Stark, told GlobeSt. that he continues to see "strength" for premium product in New York's office sector.
"We've been really focused on our new Excelsior division, which is kind of the very high-end Office Suites market and the level of demand and growth there just seems to be very strong," he said.
"It's lots of inquiries, sign-ups and such."
The Office Diamonds in Manhattan
Stark's Excelsior brand is attached to multiple properties, including 825 Third Avenue and 717 Fifth Avenue, with the latter yet to open. Both of those locations are in Midtown — a submarket that Adam Stark is "centric" on and remains focused on.
"The elite Plaza District, Fifth Avenue, Park Avenue area; that's [where we] get a lot of calls and requests for," he emphasized.
"A lot of people who want to be there, especially a decent number of international clients and [people in general], are interested in that."
Then there's an emerging submarket that Adam Stark pointed to — Third Avenue in Manhattan. He refers to the corridor as one of those "interesting value pockets in the city" that's "moving up quickly." A few years ago, this area was seen as just a convenient place to operate, rather than a premium place to be, he recalled.
Clients today, according to Adam Stark, are looking for workplaces surrounded by a "full premium experience," which includes buildings with upgraded lobbies, amenity floors with cafes and lounges, glass windows that allow plenty of light entry and modernized construction. These are features that the Excelsior brand is offering.
Catering to Tech and Finance Players
Importantly, Stark Office Suites needs to appeal to its client base, which focuses on those in the tech and finance sector to support their capabilities.
"The tech infrastructure is crucial. Making sure that there's a deep, solid technology infrastructure that's capable of meeting all of their needs, in terms of bandwidth, latency, security [and] customization, Adam Stark emphasized.
"We find in the senior [segment] of the higher end market, people do want to have some ability to at least customize the solution a bit and be able to work with us on that."
Of course, at the forefront of everyone's mind is how the oil shock caused by the war in the Middle East will impact the global economy. While that isn't clear yet, Adam Stark noted that he has yet to see this translate in the decision-making process, with demand from a deals perspective remaining high.
While he does admit concerns do exist, he remains bullish on Class A and A+ office going forward.
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