For all the talk of late about Class A, flight-to-quality office properties in New York City, there’s been an assumption about exactly what “quality” means: high-end features, top-of-the-line amenities, and so many everyday conveniences that tenants and their employees never even have to leave the building. Or that was the thinking. But what if office Commercial Observer Read More Channel, More, 817 Broadway, Class A office space, Colleen Wenke, Essex Crossing, Jane Luger, National, Taconic Partners
For all the talk of late about Class A, flight-to-quality office properties in New York City, there’s been an assumption about exactly what “quality” means: high-end features, top-of-the-line amenities, and so many everyday conveniences that tenants and their employees never even have to leave the building. Or that was the thinking.
But what if office workers want to leave the building? What if they desire all that Class A quality affords, but in a dynamic New York ecosystem rather than the equivalent of an ultramodern office park?
The developer Taconic Partners has treated the flight-to-quality narrative differently than most, in particular at their office and retail property at 817 Broadway, and within their massive Essex Crossing development, which has redefined the Lower East Side for modern tenants while leaning into what New Yorkers already love about the area.
Essex Crossing Office Corner Taconic Partners
In the process, they’re developing an office sector story more positive than most in the market today.
“There is a much-publicized flight to quality right now, but it isn’t just about Class A versus the rest of the office sector. It’s about office and mixed-use developers needing to be proactive about creating commercial ecosystems that appeal to the tenants they want,” said Colleen Wenke, president and chief operating officer at Taconic.
The location of 817 Broadway in the heart of New York’s Union Square neighborhood is drawing investment management and financial services professionals seeking to work in an area more reflective of the city’s overall personality than in office-saturated Midtown or the Financial District.
In addition to an elegant rooftop terrace with 360-degree views of the city skyline and tables and benches for socializing and working outdoors, plus an elegant, newly restored facade, 817 Broadway offers retail and office spaces including full floors of almost 10,000 square feet.
For Essex Crossing, its presence in the Lower East Side means that tenants will feel an authentic connection to local history and tradition, as well as the area’s arts, entertainment and nightlife cultures. The offices there are less defined by any specific industries, and more by the neighborhood’s overall diversity, helping create the same within the local office ecosystem.
“Essex is seeing demand from large, established companies looking to energize their employer brands, and from dynamic, creative firms looking to attract and retain the educated talent that is excited by being in New York’s most storied neighborhood,” said Jane Luger, vice president, commercial asset management for Taconic. “It also doesn’t hurt that the selection of local lunch options, including within the The Market Line and Essex Market, are among the city’s best.”
Essex Crossing Taconic Partners
“For both 817 Broadway and Essex Crossing, we developed in neighborhoods outside the traditional Financial District and Midtown areas because we know that, for example, VCs and other innovative investment firms want something that is elevated, unique, and near where their teams want to live and spend their free time,” said Wenke. “For that sector, Union Square is ideal. We took a beautiful, historic building at 817 and upgraded it for modern innovators and investors — giving them stylish spaces, including prebuilds, that empower their teams but also retain a classic New York feel.”
As Wenke indicates, location is only one factor distinguishing Taconic’s offices in these areas, as the company has designed and furnished prebuilt spaces that make establishing an office base in these buildings as easy as walking through the door.
Taconic created highly stylized, full-floor prebuilds at 817 Broadway that occupy the building’s entire second and fourth floors, with 9,943 square feet available on each. Essex Crossing offers similar convenience in prebuilds, with two 11,000-square-foot prebuilt office spaces on the third floor of the complex’s 145 Delancey Street, and 7,500 square feet of shared amenity space on the building’s second floor.
Taconic’s forward-thinking approach to prebuilt offices pays off in ease of use, and a boutique experience for their corporate tenants.
“There is demonstrable evidence that tenants prefer active commercial owners who help empower occupant success — and nowhere is this truer than in companies that are scaling. Prebuilts offer a fast, turnkey solution that helps seamless growth,” said Luger. “The key, of course, is that these need to be thoughtfully designed spaces within great buildings and neighborhoods that energize the tenant’s workforces. Both offices’ prebuilds offer singular spaces that leave plenty of room for tenants to retain and develop their identities.”
In addition to providing an alternative to the now-familiar glass and steel high-rise environment, these Taconic office properties offer tenants a factor of convenience not available in all of Manhattan’s office districts.
“After the pandemic, employees are re-examining their commutes,” said Wenke. “By the numbers, the Lower East Side and Union Square areas are two of the easiest and shortest commutes from where young, educated talent actually lives, in addition to being two of the most vibrant neighborhoods in the city. The office is a talent acquisition tool for companies, and you can help acquire and retain talent by being in places where your workforce wants to be.”
That final point is significant for Taconic, which believes unique office environments are a major advantage in recruiting top talent, and designed these offices with this in mind.
“The day-to-day experience of being in an office and feeling at home in the surrounding neighborhood is a defining facet of true quality,” said Wenke. “As more employees return to the office, the experience of the workday — the commute, the coffee break, the physical workplace, the lunch, the amenities, the offsite meetings, the walk, the happy hour — will increasingly be key to retaining talent and empowering productivity and creativity. Thoughtful development means preserving what makes an area already great, and building an experience that has desirable offerings within that neighborhood context.”
While some could see Taconic’s establishment of prebuilt spaces in nontraditional office neighborhoods as defying current trends driving flight to quality, Wenke believes Taconic is leading the charge toward a more desirable experience for office tenants and their employees.
“The offices at 817 Broadway and Essex Crossing are driving a trend toward more bespoke spaces that work within the context of neighborhoods where certain kinds of occupants want to be,” said Wenke. “As a result, we’re seeing a great deal of leasing momentum, including in our offices, retail and F&B spaces. In fact, 817 Broadway is now nearly fully leased. This is a testament to both properties’ strategic focus on their tenant bases.”
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
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