Location, Location, Golf Simulator. A Developer Cracks the Office Market Code.
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Location, Location, Golf Simulator. A Developer Cracks the Office Market Code.

New amenities, from a gym to a movie theatre, and a good commuter location filled this suburban office tower

By PETER GRANT
Wed, Oct 16, 2024 9:29amGrey Clock 3 min

Manhattan’s office-vacancy rate climbed to more than 15% this year, a record high. About 80 miles away in Philadelphia, occupancy also is at historically low levels. But a 24-storey office tower located between the two cities has more than doubled its occupancy over the past five years.

Developer American Equity Partners bought the New Jersey office tower, known as 1 Tower Center, for $38 million in 2019. At the time, the 40-year-old building felt dated. It had no gym, tenant lounge or car-charging stations.  The low price enabled the firm to spend more than $20 million overhauling and luring tenants to the 435,000-square-foot property.

Now, the suburban building is nearly fully leased at competitive rents, mopping up tenants from other buildings after the owner added a new lobby, movie theatre, golf simulator, fitness centre and a tenant lounge featuring arcade games and ping-pong tables.

“Our tenants told us what they needed in order to fill up their offices,” said David Elkouby , a co-founder of American Equity, which owns about 4 million square feet of New Jersey office space.

The new owner also liked the location at the 14-acre hotel and conference-centre complex, off the New Jersey Turnpike’s Exit 9 in East Brunswick. The site is a relatively short commute for millions of workers in central New Jersey and is passed by 160,000 vehicles daily.

The property’s turnaround shows how office buildings can thrive even during dismal times for most of the U.S. office market, where vacancies remain much higher than pre pandemic.

Success often requires an ideal location—one that shortens the commute time of employees used to working at home—and the sort of upgrades and amenities companies say are necessary to lure employees back to the workspace.

One Vanderbilt, a deluxe office tower with a Michelin-star chef’s restaurant and plenty of outdoor space in Midtown Manhattan, is fully leased while charging some of the highest rents in the country.

The 11-story Entrada office building, in Culver City, Calif., is making the same formula work on the other coast. It opened two years ago with a sky deck, concierge services and recessed balconies. A restaurant is in the works. The owner said this month that it has signed three of the largest leases in the Los Angeles area this year.

1 Tower Center shows how the strategy can be effective even in less glamorous suburban locations. The tower is prospering while neighbouring buildings that are harder to reach with outdated facilities and poor food options struggle to fill desks even at reduced rents.

The recent interest-rate cut and reports that some big companies such as Amazon .com are re-instituting a five-day office workweek have raised hopes that the office market might be getting closer to turning.

But with more than 900 million square feet of vacant space nationwide and remote work still weighing on office demand, more creditors are seizing properties that are in default on debt payments.

Rates are still much higher than they were when tens of billions of dollars of office loans were made, and much of that debt is now maturing. The recent interest-rate cut doesn’t mean “office-sector woes are now over,” said Ermengarde Jabir, director of economic research for Moody’s commercial real-estate division.

Lenders are dumping distressed properties at steep discounts to what the buildings were worth before the pandemic. Some buyers are trying to compete simply by cutting their rents.

“Most owners don’t have the wherewithal to do what is required,” said Jamie Drummond, the Newmark senior managing director who is 1 Tower Center’s leasing agent. “Owners positioned to highly amenitise their buildings are the ones who are successful.”

HCLTech, a global technology company, illustrates the appeal. It greatly expanded its presence in New Jersey by moving this year to a 40,000-square-foot space designed for its East Coast headquarters at 1 Tower Center.

The India-based company said it was drawn to the building’s amenities and design. That made possible a variety of workspaces for employees, from quiet nooks to an artificial-intelligence lab. “You can’t just open an office and expect [employees] to be there,” said Meenakshi Benjwal , HCLTech’s head of Americas marketing.

HCLTech also liked the location near the homes of its employees and clients in the pharmaceutical, financial-services and other businesses.

Finally, it didn’t hurt that the building is a short drive from nearby MetLife Stadium. The company has a 75-person suite on the 50 yard line where it entertains clients at concerts and National Football League games.

“All of our clients love to fly from distant locations to experience the suite and stadium,” Benjwal said.



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11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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Property of the week: 32 Isaac St, Spring Hill
By KIRSTEN CRAZE
Fri, Nov 8, 2024 2 min

Spring Hill Enviro-Cottage is the ultimate fairytale of old meets new, an architectural marriage of two distinctly different eras that seamlessly come together in 21st-century Brisbane.

The Isaac Street home is one of Spring Hills original workers’ cottages that in 2010 was expertly transformed into a uniquely sustainable home with all the modern-day must-haves and plenty of boxes ticked on the wish list too.

While preserving the classic Queenslander, the 286sqm property has been reimagined to deliver an innovative and eco-friendly address. 

Kitchen joinery has been crafted from reclaimed timber, there is environmentally friendly paint, a suite of energy efficient appliances, solar power, underground water storage, and an Eco Plunge Pool.

Although the charming period facade remains, the rear of the house has an ultra contemporary backdrop of patterned Corten steel privacy screens that minimise heat and create dappled light across the interior spaces. At night, the unique partitions geometric laser-cut design provides a star-like feature in the main bedroom suite.

The considered passive design principles extend to the strategically located louvres, doors and windows that draw in cooling breezes, while a vast skylight over the dining area and kitchen allows for plenty of natural light in winter. Burnished concrete floors keep the ground cool and grand walls of glass peel back to reveal a seamless flow to the outdoors with a grassed and landscaped private courtyard. 

Although the ground floor has been designed for everyday living and entertaining, the multi-purpose front room with ensuite is an ideal guest retreat or even a perfect ‘work from home’ space complete with a separate entry via the front patio. 

Upstairs, a mezzanine lounge provides another breakout area for families, and the two first floor bedrooms open out to the traditional full-width balcony overlooking the street. These bedrooms have built-in wardrobes and desks with a shared family-friendly bathroom.

At the rear of the footprint, a freestanding two-storey pavilion features yet another living space next to the pool with an integrated bar. Above the space the top floor main bedroom has an ensuite and walk-through wardrobe.

A long list of bonus features include ceiling fans in all bedrooms and living areas, a thermostat-controlled whirlybird to extract excess heat, a 5kW solar system with a SMA Sunny Boy inverter, a 20,000L rainwater tank, a filtering and UV disinfection system and a solar hot water system with 450L storage tank.

Although there is a lock up garage, this city-fringe home is within walking distance of Roma Street Parkland, Roma Street Station and Victoria Park. Brisbane Central State School is also only two streets away.

In keeping with Queensland consumer law, properties going under the hammer cannot carry advertised price guides.

This Brisbane home at 32 Isaac St, Spring Hill is on the market with Ray White New Farm with an auction date set for November 30. For details contact agent Samuel Angus on 0411 044 949.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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