Offices With More Breathing RoomDec 15, 2011
The 28th floor of the office building at 499 Park Avenue has 17-foot-high windows that run from floor to ceiling on four sides, and they offer views clear to the George Washington Bridge and to airplanes taking off from La Guardia and Newark airports.
George Klein, the developer whose company built 499 Park in the early 1980s, occupied the 6,732-square-foot penthouse on that floor, and after his lease was up in June, the space hit the leasing market. Mr. Klein sold the building years ago, and the current owners, Hines Interests of Houston, knocked out the dropped ceilings from his former office in preparation for a new tenant.
“Our eyes lit up when we found that we had 17-foot ceilings,” said David E. Green, an executive director at Cushman & Wakefield, the brokerage firm marketing the 28th-floor space as well as space on three lower floors. The possibilities seemed immediately obvious.
The space could be perfect for a private equity firm or a hedge fund – with a lofty asking rent of at least $150 a square foot. Once a rarity in the Manhattan office market, big, brassy “vanity plates” are becoming more common, especially in new buildings, brokers say. And once seen as difficult to rent, the spaces can command some of the highest office rents in Manhattan since the recession, some more than $100 a square foot.
The airy openness appeals not only to the financial masters of the universe who want clients to see the views, but also to new media and technology firms that want a loftlike feel.
These increasingly desirable spaces are found up and down the Manhattan office market, from Midtown towers like 499 Park and 250 West 55th Street to downtown in the Goldman Sachs headquarters at 200 West Street, which opened in 2009, and at 1 and 3 World Trade Center now under construction.
In between are locations like the future 51 Astor Place, the existing 28-40 West 23rd Street and the venerable 30 Rockefeller Center, where the investment giant Lazard is redesigning its 430,000 square feet on the top floors to create a more open space.
“Constantly now, we see firms wanting to build dramatic space,” said Peter Turchin, an executive vice president at CBRE. Mr. Turchin was standing this month on the recently poured concrete of the second floor of 250 West 55th, one of the few skyscrapers to be built in Manhattan in the last decade.
When completed in 2013, the Boston Properties tower will stretch 40 stories over Eighth Avenue and be anchored on the middle floors by the law firm Morrison Foerster. The 50,000-square-foot second floor, however, is available. Its windows will run 20 feet from floor to ceiling and its columns will have as much as 37 feet between them. Mr. Turchin said the auditorium-like openness, designed by Skidmore, Owings & Merrill, was deliberate.
“When we designed this building,” Mr. Turchin said, “we thought to ourselves, ‘Why don’t we build the building the way tenants want to build their space?’ There are very few buildings like this. You see tenants do it, but they’re doing it themselves and they’re doing it with a building that’s not really designed for it.” It can be expensive for tenants to modify existing spaces. Changes might involve removing ducts; knocking out concrete slabs; and still getting only a partial run of glass from not quite the floor to not quite the ceiling.
Few existing buildings are as fortunate as 499 Park, which was designed by I. M. Pei and is sometimes called the Black Diamond because of the faceted shape of its roof – a shape only entirely clear from the inside when Mr. Klein’s dropped ceilings were knocked out.
“I was up in the space many, many years ago, when George Klein had his office there,” Mr. Green of Cushman & Wakefield said, “and, although it was dramatic in the penthouse, it was just kind of typical office space.” Typical office space – nine-foot ceilings; neat rows of cubicles; warrens of hallways, either created with the building or made from partitions – has dominated a Manhattan office market full of buildings developed decades ago.
The average larger Midtown office building, in fact, is well over a half-century old, according to 2010 data from CBRE, though that is spry compared with the average Midtown South one, which is pushing 100 (think of the Flatiron building, built in 1902) or a typical downtown one, nearing 65.
That model is starting to fade into history. At 3 World Trade Center, the 80-story tower designed by Richard Rogers and developed by Silverstein Properties, the floor plates of 29,000 to 68,000 square feet have no columns.
“We’re finding that the geometry of these floors and the absence of the columns result in most tenants needing anywhere from 10 to 15 percent less space,” said Jeremy Moss, a senior vice president of leasing at Silverstein. A benefit of that for landlords is that more tenants can fit into a comparable size building.
At 51 Astor Place, a 400,000-square-foot Edward J. Minskoff Equities development designed by Fumihiko Maki and set to open in 2013, the ceilings will run to as high as 18 feet and there will be virtually no interior columns in its floorplates of 25,000 to 42,000 square feet.
“It has a very adaptable and flexible use for a multitude of different types of tenants,” said Paul Glickman, a vice chairman at Jones Lang LaSalle, which is marketing the building. “So we’ve seen tech companies look at it; we’ve seen creative firms looking at it; we’ve seen financial firms interested in it.” The most prominent example of the trend toward higher, airier office spaces is 1 World Trade Center, the 104-story tower being developed by the Port Authority of New York and New Jersey and scheduled to open in 2013.
The publishing house Condé Nast will be the anchor tenant. Tara Stacom, the Cushman & Wakefield vice chairwoman in charge of leasing at the tower, said more than 90 percent of the interior space at 1 World Trade Center would be reached by natural light.
“I think the other new buildings that will be built in this city in this next decade will do the same,” Ms. Stacom added. She was also part of the brokerage team that advised Lazard last winter on its 21-year leasing deal at 30 Rockefeller Plaza.
The firm is renovating space it has held for almost 40 years to make it more open, including floor-to-ceiling glass walls in place of Sheetrock on perimeter offices. “It’s what tenants are demanding.”