This Week in Real Estate - 10/29/17
Employers Want to Give Workers More Space
Current and future trend reports show that overall, employers want to give their workers more space. It is likely that offices have reached the limit of densification for personal workstations, with the result being a greater emphasis on alternative interior spaces like private rooms for focus work and collaborative zones for small team meetings. Other trends indicated include an increase in the number of companies employing an activity-based work environment and a rise in the importance to clients of designing spaces that promote health and well-being. Predictions for 2018 include a further increase in alternative seating that will be dedicated to quiet rooms and individual spaces for focus work and an increased investment in people through providing additional amenity spaces focused on employee well being.
Lower East Side Office Space
Manhattan’s Lower East Side is emerging as one of the hottest new office markets in the city. A prominent example of this is Essex Crossing, a $1.5 billion mixed use development that will provide 350,000 square feet of office space. While the amount of office space is small compared with the commercial skyscrapers of more than a million square feet rising on Manhattan’s far West Side and in the World Trade Center campus, the addition could spur the creation of new office space in a neighborhood where virtually none on this level and scale had existed previously.
(Image: Taconic Investment Partners)
The Lower East Side sits in the Midtown South office submarket, which is filled with nontraditional office neighborhoods such as SoHo, Chelsea, Union Square and the Meatpacking District. In these places, demand for office space from expanding and relocating companies has skyrocketed in the last decade, and rents for some new office developments have pushed well above $100 a square foot, rivaling those of high-end, Midtown locations.
Retail’s Big Problem
Espresso chain Fika was supposed to occupy just 1,200 square feet of space in the 365,000-square- foot mall known as the Oculus inside the World Trade Center. As construction costs ballooned and the World Trade Center mall missed its original opening date, Fika's investor pulled out. But Westfield, the $15.7 billion company that operates the mall, would not let Fika out of their lease and instead dragged the company into court last year, seeking more than $5 million in promised rent. This prompted Fika to file a countersuit, which accuses Westfield of fraud and argues that it had a right to break its lease because Westfield did not deliver a usable space on time. The fact that a company as large as Westfield would engage in lengthy legal battles over such a small amount of space is an indication to many that Westfield is not as strong of a company as they claim to be, and is an overall sign that the retail market is in trouble.
This news update is brought to you by Lease Offices NYC, a New York-based brokerage firm with over 40 years of experience representing tenants in New York City for all their office space needs. To learn more, visit www.leaseofficesnyc.com