Luxury rental buildings take ‘working from home’ to the next level

When Christopher Dusman and his wife, Yao Lee, were looking for an apartment in New York last year, they compiled their usual list of preferences: washer/dryer, proximity to the grocery store, access to the subway. But their top priority was the workspace from home.

In April, the couple moved to Willoughby, a 34-story tower in downtown Brooklyn, where they pay $4,300 a month for a one-bedroom. The building is unfinished, but they chose it because it offers a very important amenity: a 22nd floor co-working space that includes semi-private banqueting and a conference room with a view of Fort Greene Park.

“Every day I am there,” said Mr. Dussmann, the entrepreneur who has founded several tech startups. “There are some days when I don’t leave the building at all.”

As Corporate America adapts to employee demands for flexible schedules, Mr. Dossman is part of a growing number of workers who want to work remotely, but not necessarily from living room sofas or kitchen tables.

The pandemic forced an exodus of workers from offices in 2020. Even as workplaces reopen, 59 percent of employees are still working remotely, according to a survey published by the Pew Research Center earlier this year. Among those remote workers, 78 percent say they want to continue to do so after the pandemic, up from 64 percent two years ago.

Developers across the country are doing what they can to make remote work more convenient to attract potential tenants, leading to a war on amenities as must-have luxury apartment buildings and apartments sag with amenities such as private offices, conference rooms, task lighting and wall-mounted screens. Broadcast kiosks and high-speed internet.

“It’s something you need to do today; it’s a convenience, like a bathroom,” said Rick Campo, CEO and Chairman of Camden Property Trust, which included a workspace called The Hub in the common area of ​​Camden Harbor View, a residential development in Long Beach, California. swimming.

In most buildings, the cost of workspaces is included in the rent, but some landlords charge a fee to reserve a room for a large meeting or for an extended period. Co-working companies like Industrious and WeWork are starting to pay attention, hoping not to break out of what could become a lucrative market.

Developers have been adding space for apartments for years, with architects designing bedrooms and cottages that can accommodate offices and other work equipment, a trend that has accelerated in light of the pandemic. Matt Vance, chief economist at real estate services firm CBRE, said average new apartment volumes have increased 9.6 percent since the start of the pandemic compared to those delivered in the 10 years before the pandemic. The increase equals an additional 90 square feet, the size of a bedroom or workspace.

He added that the demand for workspaces extended to the common areas as well. “Over the past decade, we’ve had internet cafes with kiosks and coffee makers, and common spaces in apartment buildings,” he said.

But as Americans settle into a hybrid business model, they are looking for more professional spaces where they can take a private Zoom call or gather clients for a presentation without heading to the office.

“People have high expectations,” said John G. Weigel, a senior development executive at DivcoWest, a real estate services company. “We are motivated to make sure this is as robust as possible.”

DivcoWest’s portfolio includes Park 151, a 20-story multi-family complex in Cambridge, Massachusetts, due to open this fall with 468 apartments and a common area that will include five work-from-home spaces and meeting rooms.

“It’s a big part of our amenities package, and it just got bigger,” Mr. Weigel said. “Now that you’ve proven the feasibility of working from home, we’ll see more of this.”

Other developers switch gears midway through construction. At Brooklyn Crossing in Prospect Heights, Thomas Brodsky, a partner in the family-run developer Brodsky Organization, canceled plans for an open lounge and instead added semi-private booths and “phone booths” to the building’s co-working space, due to open in August.

Richard Dubrow said developer Macklowe Properties ramped up the technology at One Wall Street, a condominium complex in downtown Manhattan, adding microphones, cameras for virtual meetings and audio-streaming kiosks to its co-working space, which is branded One Works by One Wall Street. Company’s Marketing Director.

The increased interest in work-from-home spaces comes as companies struggle with the size of their offices shrinking. Urban areas with a higher proportion of employees working from home experienced higher office vacancy rates from the end of 2019 to the end of 2021, according to a May report by Moody’s Analytics.

Real estate watchers say this concept has legs, and if managed properly, it could be successful in the long run.

CBRE’s Mr. Vance said: “There is strong demand from multi-family dwellings for this space which we believe will be a consistent trend.”

The model can be expanded in areas of higher density to include the surrounding community, said Thomas LaSalvia, chief economist at Moody’s Analytics. “It is not necessary for the residents of that apartment building to be using that space; he said.

This larger vision caught the interest of Industrious, a workplace provider with 150 locations in 65 cities around the world. “There are developers who want to create a complex that serves the tenants and the outside world,” said Jimmy Hodari, CEO and co-founder of the company.

He pointed to Monrovia, California, where AvalonBay Communities, a real estate investment firm that owns a stake in 296 apartment complexes, is renting private workspaces on the ground floor of its apartment complex to residents and the general public under a brand called Second Space Work Suites.

Al-Hodari added that a number of owners of large apartments have contacted his company regarding the partnership. “We are very close to an advertisement with one of them,” he said.

Tenants have a variety of reasons to look for a “third space,” a common area different from home and office. The home office may be too small, too many distractions, or not look professional enough to make an important virtual call with clients.

And some, like Mr. Dussmann, may have a wife who also wants to work from home.

“Most of my work is talking to other people,” he said. “It wouldn’t work if we had calls at the same time.”

The added advantage of working from home space has forced some tenants to reassess how much space they need in their own apartments.

Amina Altay, a professional and business coach, was drawn to One South First, a luxury building in the Williamsburg neighborhood of Brooklyn, because of the work-from-home space, which includes two private conference rooms and a larger boardroom. I reluctantly took a studio apartment on the block because there was nothing else available, but when I opened up one bedroom, I realized she didn’t need it.

“This comfort space is amazing,” she said. “I use it at least twice a month.”

For Ms. Al-Taie, the space has allowed her to resume in-person meetings, an important part of her work that has been interrupted by the pandemic. She tried typical co-working spaces, but she said the quality was inconsistent. At One South First, she pays $100 for a four-hour private room rental where she can put her client on a chair overlooking Domino Park and East River.

“Sometimes there are some experiences that can’t be translated through the screen,” she said.

These spaces can help renters cut other monthly costs as well, including transportation and dining out. “If I don’t move, I save $100 a month,” said Mr. LaSalvia of Moody’s.

But one of the most overlooked benefits is something an apartment alone can’t provide, and it’s what many workers are looking for after two years of working remotely: a social experience. “It creates a more communal atmosphere,” Mr. Vance said.

In Willoughby, Mr. Dossman and Mrs. Li got to know their neighbors through social events such as mixers at happy hours and wine tastings in their workspace from home. The experience inspired him and a friend to meet with other startup founders in New York, saying that hosting an event on the premises would cost $250 an hour.

“We looked at two different venues for events, and it’s a lot cheaper than a pub,” he said. “This is a good place to be and it will get better.”