Tech giant IBM’s new Manhattan office features a 25,000-square-foot, pollinator garden-filled outdoor terrace stretching the entire block between Madison and Park avenues.
The rooftop space, packed with more than 3,000 plants, isn’t just intended for employees taking an afternoon break to overlook Madison Square Park. Much of the seating comes with access to power so staff can work outdoors — if they don't get distracted by the views from 10 floors up of the skyline and landmarks including One World Trade Center and the Empire State Building.
It's an example of the lengths to which major employers are going to attract talent and existing staff to the workplace more than four years after the start of the pandemic. Across the country, having a desirable and distinctive building feature is an increasingly high-stakes game for both well-resourced employers such as IBM and office developers. Businesses across the United States see well-located workplaces with appealing perks as important to helping them lure talent and accomplish their goal of having more of their workforce in the office for more of the time.
For landlords, particularly in the largest U.S. office market of New York City, it’s also a pressing need after pandemic-driven hybrid work led to record-high vacancy this year even with some signs of improvement.
IBM’s outdoor terrace, about half the size of a football field, is a signature element of the amenities the Armonk, New York-based company included in its new 270,000 square-foot New York office at One Madison Avenue, a trophy tower Manhattan’s largest office landlord, SL Green Realty, redeveloped with its partners, completely reimagining the original structure built in 1893.
The 1.4 million-square-foot, top-tier office tower in the Midtown South market combined the existing 900,000-square-foot limestone building with some 530,000 square feet of new, virtually column-free construction in a new glass tower above.
The location, with configurations including collaborative and communal spaces, focus areas and office phone booths, consolidated 10 other workplaces IBM has closed or is in the process of closing in the city. It’s IBM’s answer to what it sees as the workplace trend of the future.
“We've always wanted to bring everyone together,” Joanne Wright, IBM’s senior vice president, transformation and operations, said in an interview. “We also saw this [space] as a vibrant opportunity to create a new, innovative and technology-led workplace experience. … We believe that's really going to attract talent … [and] drive a new level of … engagement. I think we'll see people engage and want to be in the workspace. … We saw the vision of having an outdoor space that allows you to bring your creative self to the work.”
The outdoor space is the largest usable commercial office terrace in New York, according to IBM. Wright sees it as a way for employees to bring their “creative self” to work.
Of course, other companies have been adding features to office buildings to attract workers even before the pandemic. And there's no guarantee that the effort will pay off in any way, with the city struggling with office vacancies. But IBM is making the push as part of a global effort that the company said has brought more employees into the office.
Global office openings
The debut of IBM’s Manhattan office follows that of new office openings in London, Toronto, Tokyo and Madrid in the past year, Wright told CoStar News, adding those spaces have seen higher utilization rates versus those at previous locations. The Manhattan office has been designed with “more collaborative space, flexibility, variability [and] amenities,” Wright said. IBM also is set to open a new office in Austin, Texas, after deciding to take over a big lease from Facebook parent Meta.
Appealing features at office buildings vary nationally — and by company. For instance, Amazon's Manhattan flagship at the redeveloped former Lord & Taylor building is set to feature a 35,000-square-foot food hall and entertainment concept that's been billed as an amenity for both Amazon employees and the neighborhood.
In another example, a landmarked building in lower Manhattan touts a speakeasy bar. Elsewhere, a 17-story Chicago building has a glass-enclosed basketball court with sweeping city views as the centerpiece of its hotel-style amenities on the top floor.
IBM celebrated the opening of the New York office, designed by Gensler, in a ribbon-cutting ceremony this month attended by hundreds of guests including New York Gov. Kathy Hochul and U.S. Senate Majority Leader Chuck Schumer.
The space includes a ground-floor lobby that is exclusive to IBM employees and features a 40-foot-long Quantum Wave light sculpture that IBM said was designed to pique “interest and curiosity from the street level.” The second floor, an escalator ride up, is intended primarily for IBM’s clients and partners and features a circular beverage bar that serves coffee during the day and cocktails after hours. The floor also has a 22,000-square-foot “innovation studio” that showcases how IBM’s various technologies are being used. For instance, a big screen recently displayed live artificial intelligence-generated sports commentary for table tennis games.
This location “allows us to collaborate with all of our clients and all of our partners,” IBM Chief Executive Arvind Krishna said at the opening ceremony, adding that New York was where IBM opened its first office in 1911. “Many of our partners from across the country are now seeing that this is a great place to come [to].”
From the second floor, employees can take internal elevators directly up to the rest of IBM’s space on floors eight through 10, with all three levels linked by interconnected staircases in IBM’s signature blue. Open communal spaces are located nearby on each of the three floors to create what IBM described as a “central hub” that serves as “the social anchor” for the office.
More employers see this type of space design as key to giving employees the opportunity for spontaneous encounters. For instance, Robert Morelli, head of corporate services at the bank HSBC, which this year also opened its new Manhattan flagship, told CoStar News its interconnected staircases allow for more “social interaction.”
The 10th floor of the IBM space also functions as its prime amenities floor and houses not only the outdoor terrace but also a full-service kitchen and cafe and an auditorium that can accommodate up to 300 people.
No assigned seats
IBM employees at the office include client-facing sales executives and consultants; its marketing and communications team; and its software developers, said Wright, based in the Armonk office. She added that some of her team also will be based in the location.
Employees won’t have assigned seats and will use an electronic workplace reservation app, according to Wright. IBM has a flexible work policy, with only executives and managers required to be in the office three days of their choosing a week, she said.
IBM said the new space can house more than 2,000 employees, with workers set to begin to arrive in late September and early October.
As IBM’s space has a unique view of Madison Square Park, the office was designed to make sure employees have access to spaces on each floor that overlooks it, Amanda Carroll, Gensler’s managing director, told CoStar News.
“It's architecturally set up to be reconfigured and utilized in any way that people might imagine, with access to one of the best location features in the entire building,” she said.
As to the outdoor terrace, which faces the east, west and south, it also was designed for multiple uses. IBM, for example, recently used the terrace to host a formal sit-down dinner for its executives.
Outdoor space “is a priority in today's market,” Carroll said, adding Gensler does a lot of work with companies that have it. “The versatility of the terrace space and the way that they can program it day to night is very unique because of the orientation with sunrise or sunset. … It was a space to work, to come together, and because this is a very central location for IBM on the East Coast, we imagine there will be a lot of people who are coming to the space.”