Some time ago we wrote a piece on market amenities. But at that time we didn’t expect an actual amenity race between neighborhoods, let alone building owners. It’s a race for amenities, and right now the CBD is winning. Whether it’s a bowling alley, yoga studio, rooftop deck or golf simulator, today nothing is out of the question.
The above usually requires deeper pockets of landlords, and the CBD has no shortage of landlord’s that are willing to pull out the checkbook to reinvest their capital in shared amenities for current and future tenants.
Take a look at Willis Tower (formerly Sears Tower). Blackstone purchased the building for $1.3B and then poured another $550M into upgrades and amenities. In addition to the 300,000 square feet retail block on the first two floors, they are adding 150,000 square feet of new amenity spaces:
– The 30,000 square foot full-service fitness center Tone
– Four floors of tenant lounges including food, beverage and service options (two of the floors are on high-rise floors boasting one-of-a-kind views)
– A private event space and bar
And the trend to invest in amenities and other building upgrades has done nothing but lure new tenants. Since the Willis Tower improvements, Morgan Stanley, GATX, Convene, Environmental Systems Design, and National Restaurant Association have committed to the tower. This is more than 375,000 square feet of leasing activity.
But these buildings aren’t just catering to established corporate tenants. To stay competitive and invest in future companies, building owners are focusing on startups by building furnished spec suites. These pre-built spaces can range from 1,000 to 15,000 square foot spaces and can be available for flexible short-term leases. As tenants are constantly changing size and location, it’s key to focus in on a building that can accommodate all of the requirements unique to a business (growth, contraction, amenities, etc.). Most startups won’t want to commit to a lease longer than one to three years, maintaining control and flexibility for future funding and hiring expectations. The CBD has caught on to these needs and have adjusted their offerings to match the demands of a typical startup.
Below are some pictures that have recently caught our attention in the amenity race. Included are the following:
– 330 N. Wabash: WiFi Lounge
– Willis Tower: WiFi Lounge, Cafe and Fitness Center
– Prudential: Rooftop Deck
Feel free to reach out to us with comments or questions HERE.