Office buildings can range greatly in style and quality, as an office space has the opportunity to impress occupants and visitors or feel like a second home to employees. In Manhattan, a Class A office product usually means it is located in a central location, possess top-notch quality and amenities, with outstanding architectural design. It is known as top level real estate product. However, there is one additional class in commercial real estate market that is known as cream of the crop - the 'Trophy' class.
A Trophy office product is usually industry leader in every respect - including technology, architectural design, posh finishes and sustainability. Due to its scarcity, Trophy office products are in the best locations in prime markets and the most exclusive in price. While, Class A office usually cost $80-90 per square foot to rent, the price of the Trophy office can go up to $150 or even $300. The Manhattan record rent was set by the 425 Park Avenue, hedge fund Citadel paid $350 per square foot for the best space of its top floor. According to the 2022 Q2 Manhattan Office Market Report from Avison Young, Trophy office properties have captured a sizable 30.9% of leases to date in 2022,Trophy net effective rents have increased by 13.1% since March 2022. While net effective rents of Class A, B and C have decreased during same period of time.
The existing 345 Hudson building is a typical Class B office in Manhattan. It offers comfortable, elegant, functional space with vast capacity for tenant improvements to the space; It doesn't have many amenities, but it gives you certain amount of common spaces and decent lobby security; there is no well designed bike entrance which usually motivates you to commute with bike, but you can still find bike parking space here, even though it is just a simple storage room; the building has its own history, but it is slightly old now with visible signs of age. It suits most businesses looking for attractive, functional space that makes an impression on clients, but without the "wow" factor.
The challenge in this project to discover the inner characteristics of this property, and convert them into unique design features, thus to create a exceptional market presence of this product.
Although the criteria is sometimes subjective, great view is always the symbol of ultra-high-end product. 345 Hudson has this inherent superiority.
Benefit from its location and proper height, the rooftop of 345 Hudson has gorgeous views of mid-town and downtown skylines, as well as Hudson River. From here, you can easily see iconic landmarks of Manhattan: the Empire State Building, the Freedom Tower, the Bank of America Tower, the Hudson Yard....Properly utilizing this superiority will significantly enhance the tenant roster and the overall value of the building.
Properly utilizing this superiority will significantly enhance the tenant roster and the overall value of the building.
Northeast, looking mid-town
Northeast, looking 7th Ave
Southern, looking downtown
Southwest, looking Hudson River
345 Hudson is located in Hudson Square special district, which is a hot spot of real estate development in past several years. The most anticipated developments around this area includes:
- King Street Improvement, which is right next to the 345 Hudson.
- the Google NYC Headquarters at 550 Washington Street;
- the Walt Disney NYC Headquarters at Four Hudson Square;
- a new 177,000 sf luxury residential building based on a 134-year-old former power plant at 100 Vandam Street;
- a new 16-story office building at 555 Greenwich Street which is right next to the 345 Hudson, it shares the same owner of 345 Hudson.
With a good design strategy, the building will not only establish the connection with the promising neighborhood, but also activate its unique value in the market.
In New York City, each building lot has its own maximum allowable floor area called development right. This floor area is the sum of the gross area of each floor of the building, excluding mechanical space, cellar space, open balconies, elevators or stair bulkhead. The original 345 Hudson building used all its development right. However, as mechanical system being upgraded in past serval decades, more and more mechanical spaces have been added to each floor, which gives the property 'unused development right' of total 17,000 sf.
That valuable 17,000 sf available floor area is the key potential of redevelopment.
In order to make 345 Hudson a competitive product in Manhattan office market, the design goals are clear:
1. Improving the overall value of the building;
2. Establishing connection with the promising neighborhood;
3. Optimizing the space for potential top tier anchor tenant;
Frame the problem
345 Hudson was built originally in 1931. Just like other typical 1930s office buildings, every single square foot is used to create office space, none left for amenity. Meanwhile, since the design intent at the time was to maximize the rentable area, the whole building lot is fully occupied by floor plate, no terrace or other outdoor space were considered.
However, the amenity and outdoor space have been two critical components of office product in current market. According to CBRE's report in 2019 based on office buildings in their database, outdoor space are more and more essential especially in recent decade. Over 75% office building constructed after 2010 offers outdoor space, and the average rent of terrace floor is around 14% higher than non-terrace floors.
Initial Idea
The initial idea is to locate new amenity and out door space on the rooftop, three options were proposed:
Option A: Roof top terrace + single floor penthouse
Option B: Roof top terrace + double floor penthouse
Option C: Roof top terrace + double floor penthouse + additional terrace over the penthouse
Review, Feedback and Insights
We reviewed all three options with developer, engineers, consultants and other stakeholders, key insights were collected as follows:
1. Without substantial reinforcement, the existing structure can hardly support double floors.
2. Future tenant might need to reserve partial terrace, for private event.
3. NYC Department of Buildings might not approval all unused development rights, so allowance will need to be considered while planning the new floor area.
Iteration
By incorporating insights from last round review, the single floor penthouse idea was maintained; the main roof terrace extended to further west side to provide wider view looking toward Hudson River; the additional terrace over the penthouse was divided into to part, the northern part is common building amenity, the southern part is reservable amenity for private event. After several rounds of internal review, two options of different penthouse footprint were proposed:
Option A: Maximizing the penthouse footprint, so main terrace splits into smaller isolated gathering spaces. This option allows users to use certain terrace area for certain purpose while not to disturb other areas.
Option B: Min. 6' passageway along the penthouse perimeter, so the gathering spaces still connect with each other. This option is naturally more flexible, users can decide how they program the whole space.
Option A
Option B
Review, Feedback and Insights
We presented justified design to all stakeholders. The overall design is practicable, no major issue was raised in terms of construction and building code. Most feedbacks were focused on space programing and leasing strategy. Key insights were collected as follows:
1. Reservable amenity is too small, it lacks sufficient supportive space.
2. All activities on the main terrace will be within the sight from the terrace above the penthouse.
Iteration
In this round of iteration, terrace over the penthouse was removed. At the same time, the penthouse itself was divided into three areas: the northern penthouse and terrace are dedicated to 17th floor tenant, tenant can decide if this space is going to be independent or open to the 17th floor; the southern penthouse and its terrace are open to all tenant for reservation; the middle area is shared supportive space and west terrace adjacent to it is always open to all users. terraces are isolated by planters, so users of different areas would not disturb each other.
Feedback
This design got approved by all stakeholders. Together with decent amount of supportive space in the middle, the southern penthouse and terrace offer tenants opportunities to hold moderate size event serving up to 400 people. Meanwhile, the dedicated northern penthouse offers maximum flexibility, it allows anchor tenant to customize their space. Also, the private terrace on north with splendid view toward Manhattan mid-town skyline is definitely a privilege.
Final Design and Evaluation
The design continuous to be polished after the final iteration, details like overhead pivot doors were added to the design to maximize the openness. The penthouse and its huge outdoor terrace added significant value to the whole building according to the marketing team. Being able to see the sunset at Hudson River everyday will undoubtedly impress clients and employees of every tenant in this building.
Existing Condition and problem
The 345 existing building is facing three streets. However, it only has a two-bay main entrance with a small lobby, and a small bike storage entrance that is not well designed. The rest of street frontages are occupied by retail spaces. This design definitely benefits ground floor leasing, but it doesn't benefit the real estate product as a whole. Users of the rest of 16 floors above couldn't feel their connections with the neighborhood, the narrow entrance and ground floor lobby limit their daily experience. They are completely isolated.
Potential Solution A: Last Mile
Due to the highly developed public transportation system and extremely high density of New York City, especially in Manhattan, over 67% of New Yorkers commute through subway or PATH according to NYC Department of City Planning. However, since public transportation is not door to door service, thus walking plays a central role in people's daily commute for the last mile. So a walk friendly design is critical.
An other commute method that is surging in recent decade is cycling. The daily cycling commute trips to work in NYC had grown 116% from 2009-2019 according to NYC department of transportation. Meanwhile, the NYC government are constantly improving the cycling in the past 20 years. For those top tier tenants, related facilities that supports cycling commute is an absolute demand.
Potential Solution B: The Adjacent Building Shares the Same Owner
The 345 existing building has three street frontages, but lots of frontage spaces are occupied by back of house spaces. This significantly decreases the connectivity with the street and it's usable ground floor area. But fortunately, the adjacent building which is currently under development belongs to the same owner. That means, two buildings can be packed as one, they can share necessary components like house space. Hence, the frontages can be designed to maximize the accessibility and connectivity to the surrounding neighborhood.
Iterations and Tests
The iteration and test process incorporated both potential solutions. The main focus was how to utilize all four street frontages, and how to differentiate themselves from each other. Meanwhile, the negotiations with future tenants were happening parallelly. That means different leasing strategies were taken into considerations.
Final Base Design
The final approved base design proposal provide maximum connectivity to the surrounding neighborhood with clear hierarchy which utilizes distinctive features of each adjacent street. Meanwhile, it also leaves sufficient flexibility for add-ons that specific future tenants might desire.
Dedicated Ground Floor Space
In Manhattan, due to the higher rent, most of tenants would not rent the whole building. Instead, they prefer to rent certain amount of floors to be an anchor tenant in order to get dedicated spaces on ground floor, including private entrance, elevators and amenity space. These anchor tenant private spaces separate themselves from the rest of building occupied by other tenants, makes their users to feel like this is their dedicated office building.
A smart ground floor strategy will be a strong stimulation among potential tenants.
Diminishing barrier between floors
Office is a place for collaborations thus to improve the productivity. So the more it is able to potentially facilitate teamwork, the better market performance of an office product will be. Working space within same floor is always open, which makes the collaboration between different employees or even different departments easy. However, different floors are always isolated from each other, which makes moving between floors are not preferred.
With that being said, an enjoyable experience to move between floors will be a rare feature in the market that sharply increases the value of each floor, meanwhile, attracts top tier tenants.
Proposed Customization for Future Anchor Tenant
With these two principles in mind, special customization for future anchor tenant was proposed upon the base design. This proposal has been included in the client's marketing package as an special incentive for target tenants.
Impacts on Goal #1: Improving the overall value of the building
According to the marketing team, the market performance of the 345 Hudson Street office space got considerably enhanced, and the overall product is now competitive among trophy class market. (Exact data is confidential)
Impacts on Goal #2: Establishing connection with the promising neighborhood
345 Hudson has been important part of the Hudson Square special district. Its name is mentioned in most of articles and reports in recent year about this neighbor among other famous developments including Disney headquarters, Google headquarters.
Impacts on Goal #3: Optimizing the space for potential top tier anchor tenant
In past two years, as the project being developed, we have observed a big attitude shift among target tenants. They are getting more and more proactive, especially the tenant who is currently leasing certain floors of this building. They are now negotiating about expanding their office space in 345 Hudson, and actively participating into the custom design process.
Architect's work is not about content creating , it is about product designing
As it is shown in this project, architect's work starts from analyzing the market and evaluating the current condition. By understanding these, problems are discovered and design goals are defined. In the design process, the many solutions are proposed and tested during a long iteration process with all stakeholders. In the end, only the most optimized design can survive and make positive impacts on the project. Architect's work is not about creating content to infill a city block, but designing a competitive product. Comparing to creating a physical building that everybody can see, most of time were spent on researching, analyzing, evaluating, testing and iterating. Also, clear goals and proper criterions to measure the success of a product are also equally important as the final polished product itself.
A good product is generated from objective observation
Most of time, experience can be benefit to our design. However, it also causes biases. Especially the market changes consistently, people can hardly guarantee their understanding is always aligning with the market itself. For example, designing an office product in 50 years ago is all about maximizing usable area. But today, such products following that principle can only be class B or even class C.
Fortunately, we got powerful tools to help us: primary or secondary researches, quantitative or qualitative data, analysis, tests, etc. As long as they are being used with a objective mindset, they will bring us the most precise interpretation of the market, and strongly inspire our design.
