One Of New York’s Largest Developers On Creating Real Estate Post-Pandemic
The coronavirus pandemic has thrown into question many elements of how we work, live and spend our leisure time. The knock-on effect on the real estate we design is only just starting to be explored.
However, cranes continue to stretch tall across major cities such as New York, and buildings are rising from the ground. Are the real estate developers behind these schemes carrying on with designs that were created pre-Covid, or have changes been made? What factors, including Covid, are influencing the construction decisions they are making?
To answer these questions, Yardi U.S. Vice President of Commercial Brian Sutherland, whose company creates property management software, spoke to one of the company’s most prominent developer clients in New York: SL Green Realty Corp.
“We know that our clients have always needed to be as agile as possible during construction, for example using our software to accommodate changes in design while ensuring budgets and timescales are adhered to,” Sutherland said. “But Covid has required all businesses to rethink in some way. Is a traditional office product still the right product to construct? Should a developer pivot towards mixed-use or multifamily? We wanted to get a feel for the market.”
The Offices Of Today
SL Green owns some of the most recognizable properties in the Manhattan skyline and has more in the pipeline, including the redevelopment of One Madison. Projects such as these have been underway for some time pre-pandemic, but SL Green Chief Operating Officer Edward Piccinich said he believes that construction progress will remain unaffected because the firm already had an eye on the evolution of the traditional office.
“The remote work trend is nothing new, but it has been accelerated because of the pandemic,” he said. “It’s something we’ve thought about for the past decade, and our projects were designed to promote flexible layouts, amenity spaces and tenant wellness at the forefront.”
Piccinich described the company’s new flagship property, One Vanderbilt, as “everything you can’t find at home." The new supertall, currently the second-tallest building in New York, features a large boardroom, 140-seat auditorium, meeting spaces, lounge areas and an outdoor terrace overlooking Grand Central Terminal.
“Offices are a place where people learn and innovate through human interactions,” he said. “With our building designs, we can bring some of the comforts of home to the office through our amenity programs, whether it be flexible workspaces, outdoor space or curated food offerings.”
SL Green has also launched its own flex office business at One Vanderbilt, Altus Suites, offering smaller spaces and shorter-term lease options, to address the increased demand for this type of space post-pandemic.
A Focus On Wellness
Wellness has been creeping up on developers for years, but there’s no doubt employee health and well-being is even more important today than pre-pandemic. This includes access to amenities, but also the design of workspaces. Piccinich said that tenants at One Vanderbilt, for example, “can’t stop raving about how much natural light they get on their floors."
“Tenants are designing spaces with wellness and productivity at the forefront, so we’re seeing more open-concept layouts to support a light, airy feeling, with breakout rooms and areas that encourage a plug-and-play culture,” he said. “The design of our new offices at One Vanderbilt exemplify these features associated with the building’s slated WELL Platinum certification and the response has been overwhelmingly positive.”
Of course, the pandemic isn’t the only factor influencing the type of real estate being developed today. A focus on employee health and wellness is driving the trend to introduce more natural light and fresh air. A recent Yardi survey asked 3,000 tenant decision-makers what they would spend a hypothetical $100 on when returning to the office; the most popular answer was "additional infrastructure to safeguard against harmful pathogens."
Similarly, an increasing focus on sustainability has been altering how offices are designed and managed for some time. Piccinich highlighted how efficiency has become an even more important concern.
“Whether that’s demolishing a building and diverting the waste or partnering with our tenants to implement best practices in their operations, from demolition to occupancy, you have to look at the whole life cycle of a project to understand its impact.," he said. "As New York City’s largest landlord, we are committed to reducing our environmental impact through energy optimization, capital improvements, carbon reduction, resource management and tenant engagement.”
Certainly, there’s a huge amount of change to come over the next decade as the impact of the pandemic is more fully understood. However, it seems that there will be no break or significant change of direction for the cranes that remain hard at work across New York.
This article was produced in collaboration between Yardi and Studio B. Bisnow news staff was not involved in the production of this content.
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