By Keiko Morris
When A+E Networks acquired Lifetime Entertainment Services in
2009, the cable network moved to create a single Manhattan campus
to accommodate some 800 employees.
Company leaders wanted modern design elements--lots of glass,
exposed ceilings, common meeting areas--and they hunted in several
trendy neighborhoods including Chelsea and the Flatiron
District.
In the end, they decided to stay put in Midtown, opting to lease
a 1920s tower next to their offices in another 1920s building,
merge them and renovate.
Today, the glass front along A+E's ground floor at 235 E. 45th
St. allows passersby to peer in at a sleek white lobby and a 2 1/2
-story "town hall" space with bleacher seating. The makeover brings
to Midtown some elements of loft buildings typically found farther
south in Manhattan.
The idea was to build a campus distinctly not "your
grandmother's Midtown office," something more fitting for a media
company, said Joseph Montalbano, an architect and principal of
Mancini Duffy, which designed and oversaw the renovation.
Over the past few years, office-district borders once defined by
a few business sectors have begun to dissolve, especially with the
decline of available space in trendy Midtown South and rising
rents, brokers said. Time Inc., Condé Nast and Revlon Inc. are
among the big Midtown names that have signed leases for large
swaths of office space downtown.
At least in Manhattan, there aren't that many big spaces to go
around. There are 1,395 buildings in the Manhattan office market
(Midtown, Midtown South and downtown). Thirty-four buildings, some
of which are in the planning stages, under construction or recently
completed, each have about 300,000 square feet of contiguous office
space available for occupancy between now and the end of 2018,
according to real-estate services firm Cushman & Wakefield
Inc.
As tenants remake their new homes to create a loft-like
atmosphere, landlords have been investing in renovations to remain
competitive with new buildings.
"It's no boundaries now," said John Brod, a partner at real
estate services firm ABS Partners Real Estate LLC. With rents going
up, "there has to be a lot more flexibility in tenants thinking as
to where they locate."
Public and private landlords in New York City initiated $2.1
billion in office renovation and alteration projects in 2013, a 75%
increase from $1.2 billion in 2012, according to the New York
Building Congress, a group that promotes the construction
industry.
Building owners have benefited from investments in renovations.
An analysis of 40 Manhattan office buildings that were renovated
between 2005 and now showed an average rent increase of 25% after
the upgrades, according to Cushman & Wakefield.
"This increase in the amount of buildings improved and
repositioned is more a function of trying to stay ahead of the
curve and stay competitive with things like new construction," said
Mikael Nahmias, executive director at Cushman & Wakefield and a
member of the leasing team at Brookfield Property Partners LP's
Manhattan West project in Hudson Yards. "And it's also a function
of the aging stock of Manhattan's office buildings."
When the Lifetime acquisition occurred, A+E looked into the
possibility of consolidating offices at 111 Eighth Ave., where
Lifetime had its offices in a building now owned by Google Inc. But
there wasn't enough room.
Later in its search, A+E approached the owner of the adjacent
17-story building, which had become vacant during the space search,
with a proposal to connect the two towers.
The expense of the renovation project is estimated to be in the
low millions, according to a person familiar with the makeover. A+E
declined to disclose the cost.
The building worked well with the more transparent office
environment the company wanted to create. A catwalk has been
transformed into a mezzanine with meeting rooms, a pool table and
foosball. The meeting rooms have glass walls and range from the
more traditional chamber dominated by a long table surrounded by
chairs to more intimate spaces with couches and coffee tables.
"For most of the floors, the way they are configured you can see
from one end to the other," said Stacy Green, senior vice president
for global human resources and facilities.
On each floor, the junctures where the two buildings were joined
have been transformed into common areas for socializing. Couches
and pantries with high tables and chairs are nearby. Anthony P.
Schirripa, chief executive of Mancini Duffy, calls these informal
gathering spots the "zipper" that joins the two buildings.
"This is the trend--open spaces, more transparency," Mr.
Schirripa said. "We're getting away from Dilbertville and the sea
of cubicles."
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