The commodity office playbook is “dead:” Developers bet on pricey perks

Amid hybrid work and delayed returns, office developers roll out amenities

New York /
Dec.December 13, 2021 02:30 PM

Various views from One Vanderbilt (onevanderbilt.com)

Developers desperate to bring employees back to the office are trying to lure them with pricey perks — and in some cases, it could be working.

Amid hybrid work policies and delayed office-return dates, the Wall Street Journal reported developers are still turning to added perks like outdoor spaces and on-site chefs as amenities in hopes of making their office properties more enticing than working from home.

“Commodity office is just something we’re not thinking about,” Hines CIO David Steinbech told the Journal; the company is working on making terrace options for its Houston developments. “That playbook is dead.”

One Vanderbilt in New York City is one such development laying out as many perks as it can for employees. The building has high-end air filtration systems, a 4,000-square-foot terrace and a cafe with celebrity chef Daniel Boulud in charge.

While it’s hard to definitively track whether or not those perks are pulling tenants back to the space, SL Green CEO Marc Holliday said in October the building is more than 90 percent leased. Asking rents for the top floor are $322 per square foot and $312 per square foot for the penultimate floor, making it the priciest office space in the city.

In markets across the country, demand is highest for new, top-shelf space. According to VTS data reported by the Journal, rents in the top 10 percent of most expensive office buildings are 50 percent higher than other office buildings in their respective markets in November. New York saw even higher premiums at 85 percent, while Los Angeles’ were 68 percent.

Not everyone is fearful of how the office market will fare in the wake of the pandemic, however. Related Companies CEO Jeff Blau recently predicted that New York City’s office would start to see a big influx of vaccinated workers at the beginning of 2022.

Signs of recovery blanketed the Manhattan office market in November, when more than 3 million square feet in leases were signed for the first time since January 2020, according to Colliers. However, most of those leases came before the latest variant became a big story in the United States.

[WSJ] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    SL Green snags private-equity firm at One Vanderbilt
    SL Green snags private-equity firm at One Vanderbilt
    SL Green snags private-equity firm at One Vanderbilt
    Latest fintech unicorn offers credit-score boost to renters
    Latest fintech unicorn offers credit-score boost to renters
    Latest fintech unicorn offers credit-score boost to renters
    Jonathon Yormak,founder, managing principal, East End Capital; and map of 48-02 48th Avenue in Sunnyside Queens (East End Capital, Google Maps)
    East End Capital bets on Sunnyside industrial
    East End Capital bets on Sunnyside industrial
    John Gilbert (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
    Rudin COO and tech chief John Gilbert to step down
    Rudin COO and tech chief John Gilbert to step down
    Craig Solomon, ceo, Square Mile Capital (iStock)
    Square Mile issued record $3.1B of loans fueled by multifamily, life sciences
    Square Mile issued record $3.1B of loans fueled by multifamily, life sciences
    TENNY Policy Director Martha Star and New York City Comptroller Brad Lander (NYU Wagner, New York City Comptroller)
    Last Stand: Property tax reformers recruit Lander to lawsuit
    Last Stand: Property tax reformers recruit Lander to lawsuit
    Dermot Shea, former NYPD commissioner (Getty Images, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
    Related hires Ex-NYPD commissioner to head property management
    Related hires Ex-NYPD commissioner to head property management
    LEX CEO Drew Sterrett (iStock, Twitter/Illustration by Kevin Rebong for The Real Deal)
    Startup LEX raises $15M to “take buildings public”
    Startup LEX raises $15M to “take buildings public”
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...