Emerging Patterns of Office Development
in New York City
By Mitchell Moss
In an age when telephones and computers allow people to work from
home, to get a fax in their car, and to hold electronic conferences
in cyber-space, New York City is stubborn proof that there is still
no match for the office environment and the information that flows
within it. Despite futurists' predictions that technology would make
face-to-face contact unnecessary and cities such as New York obsolete,
just the opposite has happened. New York City's 300-plus million square
feet of office space has adapted to the needs of individuals and businesses
that depend on advanced telecommunications; at the same time, office
space is being reshaped to match the growth of information-based industries,
each with its own distinctive preferences for office design and location-not
to mention wiring infra-structure. As a result, New York City's Manhattan-centered
office economy is in the midst of a profound change that is influencing
the selection of office locations as well as what goes on within the
offices themselves.
Modern, high tech offices can be found throughout Manhattan today,
and are no longer confined either to midtown, to the city's financial
district or to the city's main avenues of commerce. New York City's
office economy now extends from the Hudson to the East River and also
encompasses what were once manufacturing areas or artsy retail and
residential neighbor-hoods, like SoHo and TriBeCa, as well as Manhattan's
industrial underbelly, stretching from Chelsea to Clinton. In addition,
many of the city's landmarked buildings, from Rockefeller Center to
the Chrysler Building as well as many properties downtown, are undergoing
dramatic renovation to meet the requirements of modern business.
These changes are both a reflection of and a response to three factors
that have shaped Manhattan's office development during the past two
decades: 1) the dispersion of the financial services industry across
lower and midtown Manhattan; 2) the still evolving creation of a new
office corridor stretching from Times Square to Columbus Circle; and
3) the redesign of old industrial space to serve a plethora of specialized
businesses, especially multimedia, entertainment, and information-intensive
firms.
FINANCIAL SERVICES SPREAD ACROSS MANHATTAN
The financial services industry - still dominant in the city's economy
and thus a dominant player in the office market - has migrated away
from the lower Manhattan financial district to other areas of the
city, where buildings with large floorplates equipped with modern
energy and telecommunication systems are available. Wall Street is
still the home of The New York Stock Exchange, but it is no longer
the be-there-or-be-dead hub for securities firms and investment banks.
Rather, Wall Street has become a label for an entire industry that
is scattered across Manhattan Island (and, of course, has migrated
to Greenwich, where the laissez-faire air and the polo shirts clearly
have affected investment analysis, a fact evidenced by the implosion
of Greenwich-based Long-Term Capital Management). Investment banks
like Bear Steams and Morgan Stanley, already in midtown, are adding
space by building dedicated buildings. Others, such as Merrill Lynch,
Lehman Brothers, and CIBC Oppenheimer as well as the New York Mercantile
Exchange, have inched west out of the Wall Street core to the Hudson
River waterfront, in the World Financial Center. No less an entity
than the New York Stock Exchange has considered moving out of the
core, although such a move appears extremely unlikely.
One of the signal examples of Manhattan's capacity to reinvent office
buildings-and neighborhoods-is the makeover of the Metropolitan Life
Insurance building at 11 Madison Avenue, now the headquarters for
Credit Suisse First Boston. This 29-story building, with floor areas
approaching 100,000 square feet, was completed in 1928 as the base
for a 100-story skyscraper; though the extra 71 floors were never
added to the original structure, the building's extraordinary infrastructure
and size made it ideally suited to handle the physical weight and
technological requirements of a turn-of-the-millennium investment
bank. CSFB's arrival has spawned a new dining neighborhood that runs
south from 27th Street to Union Square. Danny Meyer, the owner of
two of the city's top restaurants, Union Square Cafe and Grimace Tavern,
is opening an entirely new pair of restaurants on the ground floor
of the CS First Boston building, demonstrating that dining establishments
are an extension of the office environment, merely another venue for
doing business in New York.
As diffuse locations change the map by offering a range of worthy
choices, the range and quality of services that neighborhoods and
buildings offer become increasingly important. Premier office buildings
must now offer far more than high speed elevators, advanced telecommunications
infrastructure, and proximity to four-star restaurants. Access to
state-of-the-art athletic and health clubs has become a de facto requirement
for New York's corporate elite. As part of the renovation underway
at Rockefeller Center, for example, a 90,000-square-foot health club
is being built at 630 Fifth Avenue-in what was formerly the high-stress-inducing
U.S. Passport Office.
With the typical Manhattan executive often working a IO-to-12 hour
workday, such facilities have emerged as an extension of the office,
equipped with treadmills that have now sprouted not just televisions
but computer terminals to pro-vide direct access to the Internet.
New York City has seen explosive growth in health clubs located in
residential areas, but office developers will soon discover that upper-scale
workers would much rather visit the gym during the work day, even
if it means giving up a two-hour, high calorie lunch.
ENTERTAINMENT: THE NEWEST OFFICE INDUSTRY
The deregulation of the television and telecommunications industries
around the world has generated enormous demand for news and entertainment
programming to fill the channels that were once restricted by government
regulation or technological constraints. New York City has evolved
into a second center for the production of entertainment and information
- assuming one can tell the difference - that feeds the world's media
markets. New York City has always been the headquarters of the major
broadcast television networks, but today, an entirely new set of media
forms and channels are used to distribute information and entertainment.
MTV was launched in New York City less than two decades ago, and Bloomberg
Financial Services, based at 499 Park Avenue, provides information
on financial markets over the Internet, as well as through radio,
television, magazines, and unique terminals. Fox News Channel sits
across the Avenue of the Americas from the NBC studios at 30 Rockefeller
Plaza.
Today, a new office corridor is evolving from Times Square to Columbus
Circle, and includes major properties for Time-Warner, Bertelsmann,
Conde Nast, Reuters, and Viacom, all in close proximity to the major
broadcast television corporations and their networks, Westinghouse/CBS,
Disney/ABC, and General Electric/NBC.
RECYCLING INDUSTRIAL BUILDINGS INTO MODERN OFFICES
New York was once a major manufacturing city. In 1950, the city had
more than one million people employed in manufacturing; today there
are fewer than 200,000 people who produce goods in New York City.
As manufacturing has moved offshore or to other locations in the United
States, much of Manhattan's stock of industrial buildings has been
converted to offices, residential units, and often retail establishments.
Some of the most exciting examples of industrial renewal have occurred
on Manhattan's west side, where the Westyard Building, located at
450 West 33rd Street, initially designed to serve heavy industrial
purposes, has been converted from an industrial structure into a back
office for banks and a corporate headquarters for a media company.
On Eighth Avenue, the bus terminal built by the Port Authority of
New York and New Jersey will someday form the base of a I million-square-foot
entertainment structure. Similarly, industrial lofts on lower Fifth
Avenue, where men's suits were once manufactured, have now been transformed
into offices that serve leading publishers of books and magazines.
A block west on Sixth Avenue, once the department-store nexus of the
city, smart developers have installed large scale retailers; Ladies'
Mile Historic District is an established discount shopping haven.
The growth of small and medium sized business, especially in the
multimedia and advertising industries, has led to the creation of
entirely new office districts in Lower Manhattan that stretch from
TriBeCa to Union Square. Old manufacturing lofts have been converted
to serve innovative, high tech businesses. For example, Miramax, the
foremost producer of independent films, is headquartered in an industrial
building on Hudson Street in the heart of TriBeCa, while Global Strategies,
Inc., an international polling and marketing firm, is located in The
Cable Building, at the corner of Broadway and Houston, the crossroads
of NoHo, SoHo, northern Little Italy, the East Village and Greenwich
Village.
The city's remarkable economic recovery has been fueled in good measure
by small businesses, i.e., firms with 500 employees or less. In fact,
more than half of all the jobs created in New York City since 1992
were in firms with less than 500 employees. According to Insignia/E
SG, during the first half of 1998, more than half of all leases involving
contiguous blocs of space have been for less than 25,000 square feet.
A key ingredient in the rise of small business has been the emergence
of a new cadre of self-employed individuals who live and work in the
same physical space. Almost one-fifth of Manhattan's financial services
industry consists of self-employed professionals, and many operate
out of combined living/work space. The availability of obsolete manufacturing
space and office buildings in Manhattan has made it possible to create
physical spaces where the traditional distinctions between work and
home have evaporated, if not vanished. Unlike suburbia, where the
office is in the home, in Manhattan the office is the home and vice
versa.
WHAT'S AHEAD
Unlike other cities, offices are not confined to a single area of
Manhattan. And no single industry dominates the office market. Moreover,
there is no industry in New York that does not depend on the office
to conduct its business, whether it is entertainment, finance, publishing,
or other media. Even professional sports is an office business-and
a retail business-in New York. Although the city's professional football
teams play in the New Jersey Meadowlands, the National Football League
is headquartered in midtown Manhattan, where it can easily draw upon
the city's law firms and advertising agencies to market its teams
across the country.
As New York City moves into the 21st century, the office will become
even more important as a place for the creation and distribution of
information, as the city plays an increasing role as a hub for both
electronic and financial communication and the face-to-face exchange
of information and ideas. Simply put, New York has proven that there
is no substitute for the office, especially in the information age.
Originally published in GRID New York
Volume 1, number 1. Winter, 1999