Signature Acquisitions has hired Studio 1200 to spearhead the redesign and modernization of 100 Kimball Drive in Parsippany. The $3 million renovation, as depicted in this rendering, will look to create a destination with a hotel vibe that will integrate co-working pods, lounges, gaming, a state-of-the-art gym and an eclectic food offering that can be enjoyed on an outdoor patio. — Courtesy: Signature Acquisitions/Studio 1200
By Tina Traster
Abe Brach gambled.
In 2019, the confectioner-turned-real estate investor bought a Class A office building in Parsippany with a single tenant, Deloitte LLP, that was planning to move to Morristown. When efforts to persuade the company to stay failed, the CEO of Cranford-based Signature Acquisitions realized he had a blank canvas of more than 175,000 square feet to create the kind of 21st-century office environment employees want.
“You have to give employees a reason to come to the office,” Brach said in a recent interview, referring to a planned $3 million capital improvement project to remake 100 Kimball Drive into a destination with a hotel vibe that will integrate co-working pods, lounges, gaming, a state-of-the-art gym and an eclectic food offering that can be enjoyed on an outdoor patio. The newly introduced “Signature Club” will also give the company’s 1,500 office tenants, with more than 15,000 employees across its portfolio, access to the building’s raft of amenities.
Even before the COVID-19 pandemic, office workers were remaking the workday with remote, off-site working habits. COVID drove home just how adaptive and productive employees could be on Zoom, working at home, cutting down on commuting.
To lure office workers back, suburban landlords like Signature are putting their grit into creating top-notch office campuses that are collaborative, social, integrative and humane. It’s no longer enough to upgrade a building with new fixtures or a splash of paint.
“It really boils down to ‘What can we do to encourage people to want to come to the office?’” said Rich Travaglini, Signature’s senior vice president and director of leasing. “The days of people sitting at a desk for eight hours — especially millennials — that’s over. Office workers want a lounge area to sit in, a comfy chair for a break, the ability to go outside and sit in the sun, a good workout.”
Signature bought 100 Kimball in April 2019 as part of a four-building, 652,676-square-foot portfolio, in a nearly $97 million deal with Gramercy Property Trust. The properties, which also included 30 Lanidex Plaza and 6 Sylvan Way in Parsippany and 100 Tice Blvd. in Woodcliff Lake, helped augment Signature’s rapidly growing, 4.5 million-square-foot collection of office assets across New Jersey and New York.
At the time of the deal, the firm was aware that Deloitte planned to leave 100 Kimball when its 15-year lease expired in July 2022. Brach thought he could persuade the accounting and professional services firm to stay.
“I made every effort to try to keep them,” Brach said, hoping to sweeten talks by reducing rent for the 175,000 square feet the firm occupied. “They were paying above market-rate rent. I offered to bring down the rent to $30 to $32 per square foot — anything they wanted. The negotiations went on for a half-year but, in the end, they wanted a more urban setting.”
Deloitte will soon move into 110,000 square feet at M Station East in Morristown, part of a mixed-use redevelopment project that replaces the Midtown Shopping Center strip mall with two high-end office and retail buildings as well as a parking deck, two plazas, a promenade and a traffic roundabout at Morris and Spring streets. Its developers, SJP Properties and Scotto Properties, recently marked the completion of the building’s core and shell.
“We understand the pull to more urban environments, which is why we must redefine and reposition suburban office buildings that were built for a prior generation,” Travaglini said.
The Garden State’s office market is sluggish. Office leasing volume from July through September was 1.3 million square feet, less than half of the second quarter’s total, according to Avison Young’s quarterly market report.
New Jersey’s office availability rate in the third quarter reached 19.1 percent — its highest since 2015 — driven by 9.2 million square feet of sublease inventory. Net absorption for the quarter was negative 0.2 percent, according to the report, reflecting an overall decrease in occupied space.
Brokers are expecting leasing to bounce back, boosted by New York City companies seeking so-called hub-and-spoke outposts in the burbs. Brach said he expects tenants in suburban Class B Morris County offices will migrate to 100 Kimball because of its value-added equation, and with rents expected to remain under $35 per square foot.
“We are competing with Class B buildings, but we can offer comparable rents and much more,” he added.
Signature, which hired architectural firm Studio 1200 to spearhead the redesign, understands employees want more than a day at the office.
“For employers to attract a new generation of employees who do not want to work remotely, they have to offer a way to be part of a culture,” said Jeff Heller, principal and managing director of Avison Young’s New Jersey office, which is marketing the property.
“Maybe not five days a week, but millennials are looking for a ‘work hard, play hard’ vibe. They want a culture within the building. That’s what we’re looking to achieve with 100 Kimball.”
Future employees and Signature Club members arriving at 100 Kimball will find a lobby concierge who will assist with check-ins and bookings for conference rooms and other facilities. Roughly 2,000 square feet of the newly designed building will be dedicated to co-working “cocoons” or open shared spaces. A game of pool or foosball will break up the day in the gaming lounge. And the food setup promises to be a departure from the standard cafeteria-style eating. Signature is looking at a compilation of daily rotating food vendors.
“If we can get Chipotle in on Tuesdays, then Taco Tuesdays will have true meaning,” Travaglini said.
Signature envisions a multitenant building marketed to pharma, biotech and medical device companies, as well as professionals in the accounting, law and financial services sectors. Brach said he expects to divide floor plates into 10,000- to 20,000-square-foot offices unless a single tenant shows an interest in the building.
“We can be more flexible because we don’t have 80,000-square-foot floor plates,” Brach said, explaining the company has the option to apportion office space because the elevator bank sits in the middle of the building.
The company hired Studio 1200 to re-envision 100 Kimball’s function and purpose around the evolving needs of employers and their employees. External improvements on the brick-faced structure — completed in 2007 on spec by The Gale Real Estate Co., then a Mack-Cali Realty Corp. subsidiary, along with The Hampshire Cos. and J.P. Morgan Asset Management — have already begun. Work was slated to start by year-end on a new entrance and an outdoor dining area.
“Brokers and tenants will see that it’s more of a destination property, which makes it different than the commodity stock that’s out there,” Heller said.
Tina Traster is a freelance writer and the editor of Rockland County Business Journal. She is also a former business writer for Crain’s New York Business, real estate writer for the New York Post and staffer at the Bergen Record.