Making Hip Out of History: How A Turn-of-the-Century Building Was Renovated To Attract Creative Tenants
When Bisnow partner Clarion Partners acquired 100-104 Fifth Ave in 2013, the firm knew the fundamental economics and intrinsic appeal of historic buildings. Often sitting in supply-constrained neighborhoods, these buildings' unique attributes not only appeal to Millennials and TAMI tenants, but they also can't be replicated feasibly in modern architecture.
"When we acquired 100-104, we realized that this type of property has long-term value that is truly one-of-a-kind," Clarion SVP Margaret Egan tells Bisnow. "The most highly sought neighborhoods in Manhattan have all retained much of their pre-war elegance, making them rare commodities. Assets with a sense of timelessness have this lux-vintage appeal, which has been very much in vogue in the office sector since acquisition, and we expect that trend to continue."
100-104 is the perfect example of this trend. Sitting in the middle of NYC’s hottest and highest income neighborhood, the building is a perfect fit for the many TAMI companies that fill Union Square. But as late as 2010, the building was in desperate need of restoration. Many considered the property a "zombie building:" technically part of the physical and historical community, but shunned by brokers and corporate tenants due to its poor maintenance.
To address this, more than $7.5M was invested for a variety of changes, including upgraded electric services, modernized restrooms and fire safety equipment, and state-of-the art elevators with card key access compatible with tenants' own security systems.
The building also received an upgraded and invigorated telecommunications system with a greater amount of secure bandwidth, eventually receiving a Platinum Wired Certification from WiredScore. Kaufman Organization principal Grant Greenspan, who is assisting Clarion as leasing and managing agent, indicates these changes were “a critical spoke” in convincing cutting-edge tech companies like Net-A-Porter and Apple the building had the level of redundancy and fiber protection they needed.
Equally important were atmospheric and aesthetic improvements, such as the clean, contemporary and technologically relevant lobby. Boasting white glass panels, an interactive directory that allows visitors to search for a particular restaurant and an overall stainless steel look, changes like these helped the building tap into and become part of Union Square’s culture.
And with high ceilings (some up to 14 to 15 feet) columns and double-exposure windows along Fifth Avenue and 15th Street, each floor presents a universal palette that attracts a variety of different tenants, including Timberland and established venture capital companies like First Mark Capital. The buildings' ownership also gave tenants the freedom (and approximately $7M) to create their own look and feel in terms of colors, staircases and even putting in writable walls.
But that doesn’t mean these improvements are complete, however. Margaret points out that TAMI firms and employees are always looking for “upgraded buildings with architectural significance, proximity to transit and services, outdoor space, sustainability and connectivity,” so keeping 100-104 Fifth Ave on the technological forefront is key.
Since taking over the building, Clarion has automated the freight elevator to facilitate bike use, enhanced outdoor spaces, annually obtained the Energy Star label and even installed web-based electric meters to allow tenants to monitor and control usage.
But do all these renovations mean that the building's historic charm and aesthetic is lost to the sands of time? Not as long as the Landmarks Preservation Committee is still around. Since the building sits in a landmark district, the LPC has been involved in the buildings’ preservation process for years. Everything from the paint in the lower portion of the building to the newly installed doors has been approved by the Committee, which reviews old photographs when evaluating improvements to ensure they are period correct.
But why do all this? What is so important about the TAMI sector that it requires such investment? Margaret says that the buildings’ stellar rent roll—including the likes of Adobe and the aforementioned Apple and Net-A-Porter—are the main drivers of office demand in this area and they genuinely appreciate period buildings in 24/7 locations, so Clarion sees no point in deviating from an already successful program.
“100-104 Fifth was one of the first buildings in the neighborhood to be renovated and repositioned by an institutional owner and got in on the ground floor attracting brand-name TAMI tenants,” she explains, “hence there is a track record of success which we believe resonates with the brokerage and business communities and allows the building to stand out as the area continues to evolve and improve."
That’s why the company continues to emphasize the buildings’ institutional ownership and management, the local attributes, overall aesthetic and the creative tenants themselves.
“We take great pride in our impressive and varied tenant roster and the caliber and design of our tenant spaces,” she tells Bisnow, “and being able to list numerous household names and tour prospects through fabulous spaces—all of which are very creative and unique—are also extremely powerful tools used in our marketing campaign."
But, she says, Clarion’s also recognized that the buildings’ bones and floor plates give them the flexibility to change their strategy and positioning should space use and market demand change. After all, the property is actually two buildings, with two lobbies, redundant elevator service and the floor plates can be combined or leased separately. And since the buildings’ floor plates have a variety of sizes, they can accommodate tenants from 5k SF, 10k SF (one of which is currently pre-built and available) and 20k SF, all of which can have a full floor presence immediately off an elevator.
But Margaret doesn’t expect the neighborhood or the building to change dramatically for a while. The building, she says, fits perfectly into the Union Square neighborhood and culture, which in turns fits perfectly with Millennials and TAMI tenants’ increased focus on location and installation that attracts and retains top talent. With outdoor spaces, modern tech and infrastructure and easy accessibility a convenient 24/7 neighborhood and NYC’s other boroughs, the beautiful, historic building will have ongoing appeal to a wide audience.
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