The Evolution Of The NYC Broker
Traditionally, leasing deals are driven by lease expirations and the growth and contractions in a company’s business. But for the past several years, leasing has been driven by a well-documented trend toward open, collaborative office spaces and a sense of community and shared purpose.
Companies are relocating to buildings that have the floor plates to accommodate both this new work style and the amenities that meet employees’ experience goals.
Spotify’s 400K SF lease at 4 World Trade Center, which also includes an expansion option on floors 59 to 61, will house 1,000 new employees in the trophy building. It is an example of companies adopting bigger and better offices.
The desire to improve the office experience has also driven an evolution in the responsibilities of brokers. Brokers have always had the role of quarterback on a project team. While a good quarterback does not perform every job on the field, he is responsible for understanding exactly what is required of every position and player.
Brokers choreograph the efforts of their clients’ project managers, architects, engineers and legal counsel.
CBRE executive vice presidents John Maher and Paul Myers represented a major ad agency in its 800K SF lease renewal in 2007. They have seen the shift in the game plan firsthand.
“Back then, we had a very traditional team, with the brokers focused on setting a negotiation strategy and coordinating the efforts of our consulting group, the architectural team and the client’s legal counsel," Maher said. “The upfront needs analysis was more of a math equation and focused on translating headcount into rentable area.”
While the calculations for translating employees into rentable area is still part of the final product, clients are more focused on the quality of the office experience, and how it impacts employee engagement, productivity and recruitment.
Upfront needs analysis has become much more complex, employing more consultants earlier in the process, sometimes years before a client begins touring prospective buildings.
For a larger transaction, teams from workplace strategy, facilities management and human resources frequently conduct employee surveys and host focus groups to help determine what their “office of the future” should look like.
Learning how it should function and the amenities that it should provide is critical.
Myers, along with CBRE vice chairman Ken Meyerson, led S&P Global’s 55 Water St. lease renewal for nearly 1M SF. It was the largest New York City lease of 2016.
“For S&P, we led the efforts of 28 CBRE employees from 10 distinct service lines to help S&P determine every facet of their workplace in the two years prior to touring buildings,” Myers said. “With these guidelines in hand, we entered the market and were able to quickly determine how each candidate building matched up with S&P’s occupancy experience goals.”
This evolution in strategy is not limited to tenant rep brokers. Landlord brokers provide valuable insight into modern tenants’ needs to help ownership reposition buildings. Major League Baseball, in the largest relocation lease signed in 2016, will be consolidating its NYC operations at 1271 Avenue of the Americas largely due to the iconic building’s complete redevelopment by Rockefeller Group.
“This redevelopment project was years in planning and specifically designed to fit the needs of today’s tenant,” Maher said.
He, along with CBRE senior vice presidents Evan Haskell and Sarah Pontius, vice chairman Howard Fiddle and CEO Mary Ann Tighe, represented Rockefeller Center in the transaction.
“Not only did the Rockefeller Group seek advice from our landlord representatives, but they also benefited from guidance from our tenant advisers,” Maher said. "We worked with the Rockefeller Group to seek input from tenant architects, LEED advisers, workplace strategy consultants and wellness experts to ensure that the massive investment they were making perfectly aligned with the needs of NYC’s next generation of tenants.”
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