COVER STORY, JANUARY 2008

DELIVERING QUALITY SPACE
Office developers are delivering what tenants want.
Stephanie Mayhew

Much of the current office development has been predicated on tenant demand, and Northeast developers are stepping up to the plate. Developers are  delivering buildings with deluxe amenity packages, office facilities set within n mixed-use projects and Class A space in a business campus environment. This month Northeast Real Estate Business  profiles three office developments that offer tenants what they want and need.

510 Madison Avenue

Spanning 30 stories, 510 Madison Avenue will feature 350,000 square feet.

Macklowe Properties is currently constructing 510 Madison Avenue, a 30-story Class A office building located in the coveted Plaza District in Manhattan, New York City. Situated on the southwest corner of 53rd Street and Madison Avenue, the 350,000-square-foot boutique office building will feature spaces ranging from 11,500 square feet to 16,500 square feet, perfect for a hedge fund or a more intimate financial services firm.

Macklowe has designed the building with its tenants in mind. “The glass tower is designed to be inspirational and to provide features that enhance the quality of the work environment,” says Sheldon Werdiger, vice president at Macklowe Properties. “The tenants  Macklowe is focusing on work 24-hours-a-day, so they are looking for an environment that fulfills many aspects of their daily lives.” To surpass the demands of its tenants, the building features unique amenities such as a full-service health club with a swimming pool, an exercise room, a golf simulator and locker rooms. “If a tenant is working late, they can take a break and still maintain an exercise regiment and a health program,” notes Werdiger. Tenants can also take a break in the outdoor landscaped terrace on the sixth floor or in the building’s first-class restaurant. The restaurant will provide catering as well as offer a private dining floor for small gatherings or receptions.

In developing 510 Madison Avenue, Macklowe took cues from tenants in their neighboring General Motors building, which has many financial services and hedge fund tenants. According to Werdiger, a majority of tenants in the General Motors building had kitchens and exercise rooms built within their spaces, and since that was the type of tenant the company will to attract to 510 Madison Avenue, Macklowe made those amenities a building wide feature. “Tenants at 510 Madison Avenue will not have to build an exercise facility into their space, they can just go downstairs. Plus, no one can build a swimming pool in their office,” says Werdiger. And rather than having a private chef and spending money on a kitchen/dining room for their individual space, tenants will have access to a full-service restaurant. “We are trying to accommodate all of the needs and requirements we thought the tenant would want,” he says.

In addition, the building surpasses air quality code requirements three to four times over in order to create the healthiest environment possible for tenants. It also features 10-foot finished ceiling heights, an all-glass façade and column-free floors. “The work environment has an almost residential quality, so the quality of life of our tenants does not have to be impacted in any way because they are working long hours,” explains Werdiger. “Studies have shown that if you provide better lighting, better air quality and better amenities, workers are more productive and work longer hours. Therefore, there is a pay back to a company to have a better designed building. 510 Madison Avenue has been designed to not only meet the corporate demands of its tenants, but the demands of their lifestyles as well.”

The building is designed by SCLE Architects in with collaboration from Moed de Armas & Shannon. Construction began in February 2007 and is slated for occupancy in July 2008.

One Jefferson Road

One Jefferson Road is a three-story building that encompasses 100,000 square feet of Class A office space in Parsippany, New Jersey.

In Morris County, New Jersey, The Gale Real Estate Services Company is constructing the fourth and final building, One Jefferson Road, at The Center of Morris County, a 90-acre business campus situated at the intersection of interstates 80 and 287 in Parsippany. The three-story building encompasses 100,000 square feet of Class A office space as well as 400 parking spaces.

The Center of Morris County is being constructed by The Gale Construction Company, and is jointly owned by a fund advised by JPMorgan Investment Management, The Hampshire Companies and Mack-Cali Realty Corporation. The Center already contains three premier Class A office buildings. The first building, 200 Kimball Drive, was constructed in 2001 and was fully leased to Novartis Consumer Healthcare, Kelly Drye and Warren. It contains 175,000 square feet of Class A space. The 400,000-square-foot 300 Kimball Drive was completed shortly thereafter and was a build-to-suit project for State Farm Insurance. Gale completed the third building, 100 Kimball Drive, in spring 2007. The five-story building totals 175,000 square feet and is anchor tenanted by Deloitte & Touche USA. According to Mark Yeager, president and chief investment officer of The Gale Real Estate Services Company, after the success of 100 Kimball Drive, the company felt the time was right to construct the final building planned for the business park.

Designed by Rotwien & Blake Architects, the building’s exterior is comprised of granite with smoked reflective glass, and the interior features hardwood accents and granite flooring. The building also contains a two-story atrium lobby with Mahogany wall accents and granite flooring, and the office space boasts ceiling heights of 9 feet. The Center of Morris County also offers amenities such as a fitness facility, a cafeteria, walking trails and upscale landscaping. Yeager explains that a campus setting allows Gale to deliver amenities that are not often found in a single office building.

Gale is currently in talks with several perspective tenants and expects to have the building substantially if not fully leased when it is ready for delivery in fourth quarter 2008. According to Yeager, the company will be targeting tenants that are looking for large blocks of space in high-end buildings. “Our theory is to deliver truly high quality space and do it in big blocks,” he explains. “We deliver a product that caters to the larger tenants that have very few choices, and as a result, price is typically not their main focus.”

Gale is focusing on bringing in tenants from industries such as financial services, professional services and to some extent pharmaceutical firms. “All of these industry segments have a large presence in the Parsippany marketplace, so we anticipate that it will continue from a mainstream standpoint,” notes Yeager. “There are certain subsets of the pharmaceutical industry that are expanding instead of contracting in this market, as well as consumer products firms and technology firms.”  Once One Jefferson Road is complete, The Center at Morris County will total 850,000 square feet. 

Quantum V

Quantum V is the final office building within the planned mixed-use development SouthSide Works, a 34-acre lifestyle waterfront development in Pittsburgh.

The Soffer Organization is also developing its last office building, Quantum V, in its mixed-use development SouthSide Works in Pittsburgh. SouthSide Works is a 34-acre lifestyle waterfront development that features office, retail, residential and entertainment options within a landscaped complex that is in close proximity to downtown Pittsburgh. The development of Quantum V is part of the overall master plan for SouthSide Works, and it is part of the redesign of the riverfront block that will also be home to an upscale hotel and condominium tower and conference center, the Hofbrauhas restaurant and other residential developments.

Construction on the new office building is anticipated to begin once a major tenant is secured. Scott Astorino, manager of brokerage and leasing of Grant Street Associates, the exclusive leasing agents for Quantum V, explains that this leaves the design of the building flexible. “The building could be four, five, or even six floors and could range from 150,000 to 250,000 square feet with floor plates ranging from 30,000 upwards of 50,000 square feet,” he explains. The building is set to contain retail space, but the type of retail tenant the developer targets will also be contingent on the tenant or tenant mix that is secured.

Astorino notes that the mixed-use development itself is a big draw for tenants. “SouthSide Works is a unique development with several other office buildings, high-end urban living and retail such as the Cheesecake Factory, REI and Addidas,” he explains. “It is something that we are not used to having in Pittsburgh.”

Steve Kasunich, senior vice president  of leasing for The Soffer Organization says that the company has had much leasing interest. “There are several large users looking for space in the area, some of them up to 450,000 square feet,” he says. “We will either land one big user or a portfolio of smaller users quickly.”

The design of Quantum V will complement the other office buildings within the development as well as the lifestyle center component, but it will also take particular advantage of the riverfront location. In addition, the design will also reflect the tenant that is secured. “Soffer will work with the tenant or tenants to modify the design if needed,” says Kasunich. “If a large tenant wants the entire building and a specific design, we would work with them.”

Special amenities in Quantum V will include security key card access, integral loading dock and a dedicated freight elevator, high-speed Internet access and abundant parking, as well as extensively landscaped courtyard and picnic areas throughout the property. In addition, the Urban Redevelopment Authority of Pittsburgh has constructed four parking garages, consisting of 2,326 spaces, to support the surrounding office and retail facilities. “Quantum V’s most significant amenity is SouthSide Works and everything that comes with it. From unique, ethnic restaurants to the Cheesecake Factory and retailers such as BCBG.” Astorino explains. “It really has everything and is a unique product.” The development is also situated only a few miles form Pittsburgh’s Central Business District (CBD). “Quantum V offers the convenience of the CBD, but with a much different way of life with retail, residential and food,” says Astorino. “It is a better atmosphere and a different feel than downtown.” Once a major tenant has been secured completion is anticipated 18 to 24 months later. 

No matter where you look in the Northeast, sustainable, high-class office space is taking shape — delivering just what the tenant needs.

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