11.16.23 - Office lobbies go lush
' Lobbies may no longer be merely places to pass through. Office landlords are taking the usually utilitarian spaces and turning them into venues to see TED speakers, play shuffleboard and sip Manhattans.
In the face of persistently high vacancy rates, the extra oomph could help certain towers stand out, according to tenants, brokers and landlords. But there may be even more existential considerations, as the fate of swaths of the office sector can seem to hang on getting more workers to show up.
“The bar is higher than it’s ever been in terms of enticing people to come in from their homes and to make it feel as pleasant as possible when they do,” said Daniel Rafkin, a director with the firm Hines who is putting the finishing touches on a lobby in the Hudson Square neighborhood that has a stadium-seating-lined meeting space, a game room and a tenant-only café.
Ground-level amenities do jack up a project’s costs, Rafkin admits; nothing is being sacrificed on higher floors to allow for them. “But they’re a critical element to compete today,” he said.
For decades, lobbies had benches, a mailroom and vendors selling newspapers and candy bars. But as tastes and technology have changed — security passes are often now emailed over in advance of visits, obviating the need for a stop at the security desk — the bases of high-rises have evolved too.
When it comes to repurposing the obsolete square footage, some developers are taking a page from the playbook of hotels. At the former headquarters of CBS in Midtown, on Sixth Avenue between East 52nd and East 53rd streets, Harbor Group International is converting half of the building’s 12,000-square-foot lobby into a tenant-focused lounge. Opening in December, Club 53 has dark walls, soft furniture and a chandelier to distinguish it from the more-prosaic main entrance.
“It’s a place to sit down, gather your thoughts and scroll through your emails,” said William Vazquez, a manager with Harbor Group, which bought the 38-story tower from CBS for $760 million in 2021, in the middle of the pandemic, and decided that the building needed a $128 million reboot to survive. “It’s also about serenity.”
If occupancy is any indication, the building, which is simultaneously converting a basement-level copy-machine center and mailroom into an amenity floor with a 2,700-square-foot gym, seems to be in good shape. In October it was 100% leased, though CBS vacated five-and-a-half floors at the end of the month.
An upscale vibe
The vibe is less Hilton and more W in the lively lobby of Penn 1 on West 34th Street, thanks to a recent $450 million redevelopment of the amenity and retail spaces at the postwar tower by Vornado Realty Trust.
The developer replaced the tall security desks inside the front doors with lower-to-the-ground versions to create a more welcoming appearance, said Glen Weiss, the company’s co-head of real estate, during a recent tour. Near them, stairs whose risers sparkle with embedded lights whisk visitors up past a pair of soaring 20-foot-by-11-foot screens that show baseball highlights, or occasionally, Nintendo battles. They face a long, spacious room that has a flickering gas fireplace at one end and bookshelves at the other. And the Landing, a restaurant and bar open to the public, offers a casual meeting spot for tenants and visitors throughout the day, Weiss said.
“We had to create something that would entice people to come back to the office and that wasn’t going to be some boring old cubicle,” said Weiss about the project, which was conceived prepandemic.
But the lobby’s popularity with on-site employees suggests that even as the pandemic is over, social-distancing habits ingrained over the last few years may have become a permanent part of the modern office DNA. “The pandemic in many ways proved us right,” Weiss said. Since the renovation began in 2019, the 2.5 million square foot tower has leased 700,000 square feet of office space to tenants like Samsung, WSP and Anthem at rents of more than $90 per square foot, an increase from the $60 building rent average pre-upgrades, he added.
Joining the revamped Penn 1 in a few weeks will be a retooled Penn 2, a 31-story, 1960s building across the street by Madison Square Garden. There, too, Vornado has put a lot of muscle into redesigning the balcony-lined lobby as part of a buildingwide, $750 million redo. Among its highlights is a meeting space called a town hall that offers views of busy Seventh Avenue through soaring windows and features seats that fold out like bleachers in a grade-school gym.
Employees of any of Vornado’s Penn-branded towers can avail themselves of the town hall for retreats, TED talks or annual gatherings, a perk that could help bond Vornado’s Penn Station-area portfolio and give it the sense of a “college campus for adults,” Weiss said.'