Pavement To Penthouse—The Latest Trend In Office Buildings Can Be Found High In The Sky
Glassy and classy. With light, decks and even tennis courts and pools, it’s no wonder that office penthouses are taking off.
Gone are the days when a Manhattan office building was just that. Competition has seen them add gyms, open plan dining areas and spa-like lobbies with high end artwork. The latest accoutrement occurs not inside but on top of the existing structure. A glass penthouse.
This real estate bling not only adds square footage but a certain panache and hipness, which landlords feel may lure companies their way.
“You feel like you can reach out and grab the spire of the Chrysler Building,” said Tishman Chief Executive Rob Speyer when discussing the penthouse his company put on top of the Met Life Building. Now, when high flying execs want to feel the gravitas of their power they can step out of their 24,000 square-foot, glass-walled penthouse on the 58th floor with dramatic views of Manhattan’s iconic peaks. In the landlord’s eyes it was $24 million well spent.
Having quickly leased the gleaming penthouse to a private equity firm, the Wall St. Journal reports that Tishman has another office penthouse in the works addition, this time with a terrace, at 520 Madison Avenue. That project is expected to cost $35 million, according to the person with knowledge of the matter.
Of course not all office buildings have penthouses which are also office spaces. The residential penthouse on top of landmarked The Woolworth Building in downtown Manhattan is being completed and is expected to be listed for $100 million. There are clearly more companies with that kind of money than individuals, so it’s hardly surprising that , for the most part, new penthouses are for corporate use.
Sticking a building on top of a building, one often tens of storeys up in the sky is not an easy proposition. Heating, cooling and water lines all need to be re-routed not to mention the considerable task securing air rights and of taking a building materials up to the top of an already occupied building. Still, it’s an expense landlords feel is well worth it.
“I am talking to a lot of landlords who want to add an additional structure on top, because if you add a structure you are competing with new product, and new product today is getting over $90 a square foot,” said Mitchell Konsker, vice chairman at real-estate-services firm JLL.
“Because there are so few available, it commands a premium.”
And now the Pandora’s box of building in the sky has been opened, there is, apparently, no end to the creativity which is ensuing. At 787 11th Avenue, Georgetown Co. and its partners are adding a two-story, 90,000 square-foot glass box with terrace space, a tennis court for its top-floor tenant, Pershing Square Capital Management LP.
There may be another reason that office penthouses are so popular. They are great for parties. Coupled with sprawling decks, potted plants and even pools, unwinding after a hard day office during the summer time has never been easier.