Give them amenities, many amenities, and they will rent.
Commercial developer Robert P. Weisz has proven that at his once-empty, now fully occupied 800 Westchester Ave. office building in Rye Brook. There one can have one”™s car washed, hair cut, shoes shined, shirts or skirts dry-cleaned, paycheck banked, lunch served and tense muscles massaged without leaving the premises.
Weisz, the head of RPW Group Inc., will do much the same to attract Fortune 500 companies as tenants at his 1133 Westchester Ave. property in White Plains. His company late last year paid $76 million to acquire the 620,000-square-foot building on 74 wooded, rolling acres from Armonk-based IBM Corp.
In a phone interview last week, Weisz said he will put $15 million this year into renovations to the sprawling building, about 100,000 square feet of which will be set aside for amenities. Those include a restaurant and cafeteria, full-service bank branch, beauty parlor, conference center, sundry shop, car wash, dry cleaner, shoe-shine stand and a fitness center whose staff will include masseuses, yoga and Pilates instructors and personal trainers, Weisz said.
The developer also plans to build a four-story, 120,000-square-foot, 150-room hotel in front of the existing building off Westchester Avenue East at an estimated cost of $25 million to $30 million. From 10 to 20 percent of hotel business is expected to be generated from tenant companies, he said, while its accessibility and visibility at the intersection of I-287 and Hutchinson River Parkway are expected to bring in passing travelers.
“We have a number of operators that are competing for the hotel,” Weisz said. “There is a very big demand for hotels now in Westchester County. It”™s probably one of the strongest markets in the country.”
Â
Luring Fortune 500s
The renovated office building also will house a day care center for 30 to 50 children, Weisz told the White Plains Common Council last week at a public hearing on a proposed city zoning ordinance amendment needed before he can open an extended-stay hotel, day care and restaurant in the campus-office district.
Â
He said his building, which when fully occupied is expected to house 2,000 employees, cannot alone support a day care center. “We definitely need to go to the surrounding buildings” in the corporate parks that line that stretch of Westchester Avenue and I-287.
At the Monday night hearing, the developer pointedly noted that his proposed project will receive no tax abatements from the city or other government agencies. Several White Plains residents, addressing Mayor Joseph M. Delfino and Common Council members, criticized the tax breaks given developers in the city”™s economic “renaissance” of recent years while homeowners each year see their property taxes increase and school districts struggle with revenue shortfalls and bloated budgets.
Construction has begun on an approximately 30,000-square-foot glass atrium at the main entrance to the former IBM building. Weisz said the renovations should be completed by the end of summer. Hotel construction could begin next year, he said.
The largely vacant office building now has two tenants, IBM and Starwood Hotels and Resorts Worldwide Inc., each of which occupy about 10 percent of available space, Weisz said. Regarding prospective corporate tenants, “We are in final negotiations with several Fortune 500 companies,” he said. Those tenants might be announced “within the next couple months.”
Cushman and Wakefield, the developer”™s longtime real estate broker and a tenant at his 800 Westchester Ave. building, is marketing the 1133 Westchester property.
Will Weisz”™s White Plains property be competing for tenants with its office-campus neighbors in Harrison and White Plains, the Platinum Mile holdings of RexCorp Realty? RexCorp has embarked on a three-year, $20 million repositioning project for its 14 buildings that straddle I-287.
“Not really,” Weisz said. “The tenants that we are working with are usually tenants that are looking for the amenities.” At 1133 Westchester, approximately 100,000 square feet have been allocated for that purpose. “Most buildings in Westchester are not 100,000 feet in total size,” he said.
Â
”˜A natural alternative”™
Rexcorp”™s Platinum Mile buildings range from 38,000 square feet to 160,000 square feet.
“Westchester now is changing in terms of the interest it”™s generating from tenants,” Weisz said. “Normally Westchester was a market of smaller tenants ”“ 10,000 to 20,000 square feet. In the last four months, the market has dramatically changed. There are a number of tenants between 50,000 to 150,000 square feet, which has not been seen in 20 years.”
The county also has its lowest vacancy rate in 20 years, Weisz said. “It”™s going to get a lot tighter,” he predicted.
“For one reason, New York City has become very expensive,” with commercial lease rates in excess of $100 per square foot, he said. “The rents in Westchester now are in the mid-30s ”“ so already that”™s a 70 percent saving” compared with New York City. “That”™s drawing a lot of people back” to Westchester.
Commercial rents in Stamford, Conn., have climbed to the $50 range, Weisz said. “Everything around us is so much more expensive. We”™re a natural alternative.”
At 1133 Westchester, Weisz expects to duplicate his rental success at his 600,000-square-foot office building in Rye Brook.
“When we purchased the building (for $40 million in 2004), most people thought it was going to be a total failure,” he said. “It was 180 degrees turnaround from that.”
“We bought the building empty and we filled it up in 24 months, 100 percent.”
He filled it first with amenities, and the tenants followed.
Â
