Midtown’s Most Accessible Submarket Is Prepping For Its Big Return
Midtown Manhattan’s Grand Central submarket is undergoing a renaissance. Some of New York’s biggest office players are betting that easy access to transit will help the area vault back more quickly than any other part of Midtown and are investing in their buildings to provide more flexibility and capture new tenants.
A 21st-century skyscraper race has, to some extent, buffered office leasing in New York City’s central business district against the effects of Covid-19. Multiple projects are set to alter the Midtown skyline and its available workspace, including the $1.4B, 77-story One Vanderbilt, JPMorgan Chase’s new $3B headquarters at 270 Park Ave., slated to open in 2024, and RXR Realty and TF Cornerstone’s recently announced redevelopment of the Grand Hyatt Hotel at Grand Central, a 1,600-foot tower at 175 Park Ave.
The neighborhood’s transformation is attracting a diverse new base of office tenants. Once the exclusive domain of finance and law firms, the Grand Central submarket began attracting lessees from the tech sector and life sciences industries prior to the coronavirus pandemic. That trend is again gaining momentum.
Following a pandemic-induced pause in the area’s commercial real estate transactions, businesses across the spectrum are seeking modern workspace in proximity to Grand Central’s transportation hub. Companies like RXR Realty are responding by investing in assets like 340 Madison Ave.
Located between 43rd and 44th streets, the Class-A office building underwent a $40M repositioning that includes a new lobby and new pre-built spaces with flexible environments to complement full-floor opportunities. RXR is actively working with Parts And Labor Design on the creation of a lifestyle-driven amenity center that offers tenants flexible conferencing and modular social spaces.
“We’re really pushing the boundaries of pre-build offices by giving tenants the ability to reconfigure their space and incorporate enhanced technology within 72 hours,” said Bill Elder, executive vice president and managing director for New York City leasing at RXR. “Our current deal flows span law firms, service businesses, tech and fintech, accounting, media, healthcare, hedge funds and government. We know the new flexible design and modularity provide us a strong competitive edge.”
The new pre-build program defines RXR’s Grand Central campus, anchored by the iconic Helmsley Building at 230 Park Ave. It allows even more flexibility, a benefit for tenants that are shifting to hybrid work environments. In pre-build offices, RXR Construction Services has installed demountable wall partitions that allow the floor plate to be modified without altering embedded systems like fire alarms, lighting or sprinklers. Furniture systems can be changed at the user’s discretion while the office core — a reception area, pantry and conference room — remain fixed.
The flexible design represents a potential cost savings to tenants. It includes architectural finishes, but it enables tenants to add more executive offices or workstations without the services of carpenters, electricians or HVAC professionals.
“We’re pre-building space to accommodate any kind of tenant, from tech firms, advertising agencies to financial firms, since companies have different needs,” said Eric Schlameuss, senior vice president of design, major projects and capital improvements at RXR. “So the program is designed to be agnostic to the user and customizable in short order to meet their specific needs.”
However, the imperative for flexible space is a commonality among many tenants as is the desire for greater value from landlords. So RXR’s construction and design team joined forces with RXR’s Digital Lab to step up the technology it developed pre-Covid to improve operational efficiencies and occupant experiences. Motion sensors are now built into office ceilings that can track where office users spend their time and how they move through their space. RXR can then provide tenants with analytic insights to help them configure the space to derive the most value.
“RXR has always had its finger on the pulse of understanding tenants' needs, especially in terms of flexibility and amenities,” said Paul Glickman, vice chairman at JLL, who represents RXR at 340 Madison. “I’m looking forward to seeing the innovations that RXR has developed come to life.”
In response to leaseholders’ demands for services and safety measures that address employees’ Covid-related health concerns, RXR’s Digital Lab launched the RxWell app. For lessees and their office staff, the software is a source of real-time data on the building’s air quality, temperature, occupancy rate, social distancing insights and cleaning schedules. Users can enter an office touch-free with the app’s door access controls.
“Prior to Covid, we were creating the app so everyone in the building could know about available services and amenities, but we’ve since added building access passes and information about Covid such as Covid testing and other health-specific uses,” RXR Vice President of Product Management & Strategic Partnerships Cory Clarke said.
Information about building programming is updated on the app regularly. Throughout the year, RXR’s experience officers, the RXO team, create agendas of in-person and virtual events centered around health and wellbeing, mindfulness, cultural and culinary interests and even social impact initiatives, all of which are posted to the app.
“RXR has always had robust tenant relations, but as we saw our buildings in our Grand Central campus attract tenants from a wider array of industries, we took that programming to the next level and added more unique and heightened experiences,” RXR Executive Vice President, Head of Marketing and Retail Leasing Whitney Arcaro said.
This article was produced in collaboration between RXR Realty and Studio B. Bisnow news staff was not involved in the production of this content.
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