ABS Real Estate
Office Space as a Product: 145 East 57th Street and the Next Generation of Manhattan Offices
In the wake of the COVID-19 pandemic, tenants were looking for a very specific combination of attributes in an office space. It had to be large and spacious for social distancing, it had to be full of light and exciting to draw people back from their homes, and it had to be conveniently located so workers could have the shortest commute and best access to clubs and restaurants. The leasing team at ABS Partners Real Estate looked at 145 East 57th Street and it was clear to them the property met all these requirements and more.
It’s a special building, Partner John Brod said of the 13-story tower. I know the market like the back of my hand and there’s no other boutique building offering private floors of this size, with windows on four sides and such flexibility in terms.
What makes 145 East 57th Street, and the two 5,000 RSF full-floor office spaces coming to market for lease in the building, so unique is how it combines every aspect of what the post-COVID office market is seeking. Emerging from the depths of the pandemic, “there’s been a flight to quality,” said ABS Partner Ben Waller. “People want to work in office spaces that are inspiring.” ABS kept this in mind when building out the new private floors, which include an open-plan on the sixth floor, as well as a more office-intensive, family-firm-friendly fifth floor, and the results, speak for themselves.
Good Bones
Even before building out these twin spaces to meet market demands, the leasing team knew they had a winner: nestled among skyscrapers in the midst of the Plaza District, 145 East 57th is flanked by a pair of low-lying buildings and backed by open space, providing four sides of light on all of the office floors. “When we first introduced the building, we had a broker’s party, and at that party, the giveaway was a pair of sunglasses because it was so bright in the space,” said Brod with a smile. “That’s very unusual in a midblock building.” The column-free floors add to the sense of openness, inviting collaboration while preserving the ability to maintain social distance so crucial to many in the post-pandemic world.
As always in real estate, location is another big selling point for 145 East 57th Street, especially in a time when commuting and public transit are becoming increasingly tenuous. “The tenants we are attracting want to be able to walk to work from the Upper East Side,” said Brod. “There are a myriad of subway lines that converge at the station a block away and FDR Drive makes driving to work very easy.” Commuters coming in via Grand Central Station can walk to the building, while midday strolls will take tenants to Central Park as well as any number of high-end restaurants and shopping destinations.
Productization for the post-COVID age
After more than two decades in the real estate business and with 14 million square feet of commercial space in their portfolio, ABS Partners is well versed in addressing the demands of the market. “You can’t just be a landlord and sit back and collect checks,” said Waller. “It’s about developing the right product, extraordinary attention to detail and being agile. Steve Jobs was one of the greatest practitioners of this approach.” In the case of 145 East 57th Street, that meant building out the empty floors with quality materials and a diversity of layouts to address the needs of tenants.
The fifth floor is 5,088 RSF and features seven offices arrayed around the outer walls as well as a large conference room and a spacious central work area, with one corner reserved for a pantry. “It’s designed for the family firm where everyone wants their own office,” said Brod. The sixth floor is 5,067 RSF and has a trio of offices as well as one large conference room and some smaller meeting rooms, while the bulk of the square footage is open. The unifying factor between the two is that each space takes up the entire floor, giving tenants complete privacy and control over their work environment. The leasing team also made sure that the lobby was inviting and personal, complete with a concierge and a rotating art collection provided by Throckmorton Fine Arts, whose gallery takes up the building’s third floor.
The right price for the right tenant
The building’s ownership has a long-term outlook, which equates to a great deal of flexibility in lease terms, which is yet another factor that many tenants are looking for in the post-COVID market.
We’re interested in getting the right terms for the tenant who shows up, said Waller, while Brod mentioned that they could go as short as two years, an extremely brief term in an industry where decade-long leases are the norm.
All these factors add up to a building that meets the current need for tenants seeking a way to bring their workers back to the office. The privacy and security of a full-floor space combined with a central location and tremendous natural light on four sides sets 145 East 57th Street apart from its competitors in many ways, and pushes the building into competition with Class A Office Space in high-rise towers that come with a high price tag. “Other buildings’ rents are double what ours are,” said Brod.
If you look closer at 145 East 57th Street, you’ll see a blueprint for how office space will be designed and marketed moving forward, as both brokers and tenants adjust their expectations for what work looks like as more people return to the office. Instead of hitting a few benchmarks and throwing office space onto the market, real estate developers, owners, and brokers need to consider the end user and build their spaces like products, meeting specific needs as they crop up instead of relying on strict lease terms. Finding the right location, designing the space strategically, and negotiating flexibly with tenants, none of these things are new, but when deployed with thought and attention to detail, the result can be more than the sum of its parts.