Office Investment Hotspots: It's All About the Talent
Bisnow’s very first national office event, which we call BOLD for Bisnow Office Leasing & Development Expo, is happening right here in New York City on Nov. 20 at 4 WTC. It’ll be a full day (8am to 6pm) of networking and panels of the foremost office experts. One big theme our panelists have already ID’d: The investment hotspots are all about the labor pool.
Clarion Partners asset management head Craig Tagen, who's speaking at BOLD, tells us his company is shopping for office investments based on where corporations are looking. Corporations, in turn, are going where people want to be. That means live/work/play destinations. Office-using businesses are migrating especially south and west to business-friendly, low-cost markets that also offer quality of life, he says. There’s a broad increase in absorption in select secondary markets, and Clarion anticipates strong rent growth there over the next two years.
Clarion continues to invest in the major coastal markets that it knows well and that drove the initial recovery, but it’s also looking for viable substitutes. Tech firms for which San Francisco is too expensive are looking in Portland, for example. So while Clarion closed on 60 Spear St in San Francisco two weeks ago, it also has acquired a pair of buildings in Portland: the former Oregonian building (above) and another on Second Avenue.
Although New York is a magnet for tech companies, those who can’t afford it might look in Raleigh. Seattle is still a good place to invest, Craig says, but Clarion also is shopping in Bellevue where tenants priced out of Seattle are heading. The investor has been busy in Texas for three years: In the past 36 months, it bought five in Houston (where energy drove the first phase of the economic recovery), but in the past 18 months, it’s also acquired five properties in Austin, including Las Cimas IV (above).
WTC Properties prez Janno Lieber, another BOLD panelist, tells us Downtown is the one NYC office submarket that’s got big tenants in each letter of the TAMI acronym: tech (Paperless Post), advertising (Droga5 and GroupM), media (HarperCollins, Time, Macmillan, and Conde Nast), and info (Moody’s and S&P). Fashion, too, is taking notice of the submarket (Revlon and Hugo Boss).
Highly educated, white collar folks, especially younger ones are moving to Lower Manhattan and all the areas around it like Brooklyn, the Jersey City waterfront, and Essex County, NJ (above, BNE Real Estate Group’s 141-unit Water’s Edge in Harrison, NJ, where leasing launched this month)—much more so than on Long Island and the northern suburbs of the city. Tribeca, in fact, Janno says, has become the holy grail neighborhood for prosperous families. The number of people living south of Canal has almost tripled since 9/11 from 23,000 to 64,000, he tells us. And the 11 subway lines and PATH train help everyone else get there quickly.
Additionally, the WTC site became a large parcel on which to build new, and that means the area has all the new in-demand building qualities like green (7 WTC, above, was the city’s first LEED office), natural light that reaches into the core of the floorplates, and new mechanical systems.
Grab your ticket to the Nov. 20, 8am to 6pm BOLD event (right in the heart of Downtown at 4 WTC) now for all the networking and office gossip you can handle.
