{"id":510070,"date":"2025-01-28T09:00:11","date_gmt":"2025-01-28T14:00:11","guid":{"rendered":"https:\/\/commercialobserver.com\/?p=510070"},"modified":"2025-01-27T15:23:24","modified_gmt":"2025-01-27T20:23:24","slug":"renting-office-amenity-space","status":"publish","type":"post","link":"https:\/\/commercialobserver.com\/2025\/01\/renting-office-amenity-space\/","title":{"rendered":"The Office Market’s Busiest Side Hustle: Renting Out Amenity Space"},"content":{"rendered":"

Picture this: It\u2019s Tuesday at 11 a.m., and your office is abuzz with life, but only when the cameras aren\u2019t rolling. Your company is a tenant at Bell Works, the 2 million-square-foot complex in Holmdel Township, N.J., that was built in 1958 as a research and development facility for Bell Labs, though it\u2019s most known these days as the set for the Apple TV+ series \u201cSeverance,\u201d which returned for its second season on Jan. 17.<\/span><\/p>\n

You\u2019re standing behind the camera\u2019s view as the show\u2019s stars film a scene in the soaring Eero Saarinen-designed atrium. When the director yells cut, you can file back to your office, through the building that, for the show, has been stripped of the restaurants and shopping that line its main floor, businesses that are open to office tenants and the general public alike. Just last week, when you were picking up a file one evening, you passed signs pointing guests to a wedding in the ballroom. There\u2019s always something happening here, which is why you mind coming into work a bit less.<\/span><\/p>\n

The needs of the office have shifted over the last half a decade. During the pandemic, landlords anxious about winning back tenants \u2014 and tenants anxious about winning back workers \u2014 went to great lengths, turning over swaths of space to install amenities meant to dazzle. These included golf simulators, pickleball courts<\/a>, living walls<\/a>, terraces<\/a>, apiaries and, when all else failed, posh lounges.\u00a0<\/span><\/p>\n

Now, as return to office shifts from suggestion to requirement for many companies, some landlords are noting that it isn\u2019t really the tenant perks but a vibrant office that mixes public and private space that makes a building an enjoyable place to work. Inviting the public in can also foster a side hustle that generates more revenue: renting spaces for non-tenant events.<\/span><\/p>\n

\u201cThe central premise is to bring life to the formerly boring suburban office campus,\u201d said Ralph Zucker, CEO and founder of Inspired by Somerset Development, the company that operates Bell Works. \u201cWe crave human contact and connection. So that, on its own, is a motivation to do things that bring in not just our tenants who are here every day, but people from the outside to use the facility.\u201d<\/span><\/p>\n

The central atrium of Bell Works, so prominently featured on \u201cSeverance,\u201d is lined with eateries, an extension of the Holmdel Library, and pickleball and golf simulator storefronts open to tenants and non-tenants alike. (Zucker said the set department of the TV show covers the new areas with walls so the atrium looks like it did before the amenities were added. \u201cThey worked very hard to make it dystopian \u2014 this vapid, empty space,\u201d he said.)\u00a0<\/span><\/p>\n

\"A
A Tedx seminar at the Boca Raton Innovation Campus in South Florida. Photo: BRIC<\/span><\/figcaption><\/figure>\n

Bringing the public into the building boosts its events business. Somerset\u2019s five-person events team at Bell Works has rented out the atrium and ballroom space for private events, to customers such as health care network Hackensack Meridian Health and Big Brothers Big Sisters. And Bell Works is fielding more and more requests for weddings and events from people who want to take advantage of its unique architecture and lakeside patio. Somerset said renting spaces for non-tenant events has helped them bring in millions of dollars in revenue over the years.<\/span><\/p>\n

\u201cOn the face, it doesn\u2019t look like it makes economic sense. It\u2019s easier just to lock people out of the building,\u201d Zucker said, noting that the central atrium is open to the public and staffed with security guards every day from 6 a.m. to midnight, at a not-insignificant cost to the developer. \u201cWe want to bring life into [the building] by having all of these non-tenant events and all these businesses that help create that Main Street feeling that is the lifeblood of our tenants.\u201d<\/span><\/p>\n

It seems to be working: Bell Works\u2019 roughly 1.2 million square feet of office space is 98 percent leased, Zucker said.<\/span><\/p>\n

CP Group, Florida\u2019s largest office landlord, is also active in renting office amenity space for non-tenant events. The landlord \u2014 which is also the second-largest office owner in Atlanta \u2014 branched into the endeavor with the 1.7 million-square-foot Boca Raton Innovation Campus<\/a> (BRIC), a former IBM research facility in Florida that now hosts weddings, b\u2019nai mitzvahs, charity galas, and other gatherings in its conference and events spaces.<\/span><\/p>\n

Giana Pacinelli, director of communications for CP Group, said opening the complex for non-tenant events was always part of the plan for BRIC, which CP Group acquired in 2018. She said that the building\u2019s been part of the community fabric for decades, and there\u2019s a lot of pride that innovations, including the personal computer, were developed there. That presence and history serves as a boon to CP Group\u2019s business of renting to the public six different event spaces totaling more than 25,000 square feet (spaces otherwise open to tenants during the workday).<\/span><\/p>\n

\u201cPeople want new space. They want new energy,\u201d Pacinelli said.\u00a0<\/span><\/p>\n

So far that\u2019s proved true. The roughly 160 events BRIC hosted in 2024 came through word of mouth and generated over $400,000 in revenue for the landlord in its first year renting space to non-tenants. To run and grow BRIC\u2019s events business, CP Group brought on an events manager with the goal of increasing the number of events by about 30 percent this year.\u00a0<\/span><\/p>\n

Similar to Bell Works, CP Group believes stocking the building for tenants and non-tenants alike with practical services and less gimmicky tenant-only amenities creates a robust ecosystem where people will want to show up to work. Baptist Health, whose administrative branch now occupies 35,000 square feet, was introduced to the complex through an event it hosted on site. Now it not only has a presence on the campus but also operates, on behalf of CP Group, a primary health care center that\u2019s a service for BRIC\u2019s 6,000 different employees as much as it is for the public, Pacinelli said.\u00a0<\/span><\/p>\n

\u201cWe have done a poor job as a society of taking those personal conveniences and bringing them into the workplace,\u201d Pacinelli said. It\u2019s been a focus for CP Group, and it helps their tenants retain and attract a quality workforce, she added.<\/span><\/p>\n

In October 2024, AmTrust RE, a Manhattan-based owner, introduced the public to its renovated amenity spaces at One East Wacker Drive in Chicago. The fully outfitted event hall features a bar, a catering kitchen and views over the city. Called 1 Events, the facility has hosted a variety of tenant and non-tenant events, including Bisnow\u2019s annual Chicago State of the Market event and an upcoming event for the Chicago Office Leasing Brokers Association featuring Chicago Bears General Manager Ryan Poles.<\/span><\/p>\n

The event hall is rented to non-tenants mainly during nights and weekends, and rentals bring in significant revenue at the building, though the company declined to provide specific figures. It\u2019s a practice AmTrust RE plans to extend to other buildings in its portfolio. The owner uses the spaces as a selling point to prospective tenants. They\u2019re available to tenants across the AmTrust RE portfolio on a priority basis and at discounted rates.<\/span><\/p>\n

Some landlords farm out the management of event space to established hospitality brands. Convene, the meeting and flexible office space company, works with landlords such as RXR and tenants such as law firm White & Case in its landlord partnership model.\u00a0<\/span><\/p>\n

That includes Venue 42 by Convene at 5 Times Square, the New York office building that is poised to undergo a partial residential conversion<\/a> (though Convene\u2019s head of real estate, Brian Holland, said Venue 42 will remain in the building). Convene operates the 30,000-square-foot meeting and conference center on behalf of RXR.\u00a0<\/span><\/p>\n

Under this business model, the landlord puts up the vast majority of capital investment and pays the operating costs of the space. Convene doesn\u2019t pay to rent the space, but charges a management fee and collects a portion of the profits generated from the space. It is, in short, harnessing Convene\u2019s global brand to monetize underutilized spaces. Before RXR and its partners SL Green Realty and Apollo Global Management filed for the partial residential conversion at 5 Times Square, the building was 80 percent vacant<\/a>.<\/span><\/p>\n

Convene also works with White & Case at a space owned by Rockefeller Group at 1221 Avenue of the Americas to run Quorum by Convene. The venue serves as the signature conference space for the international law firm but is also rented out.<\/span><\/p>\n

\u201cDuring the pandemic [White & Case] determined that they want to build the most robust meetings and training facility on Earth for law firms,\u201d Holland said. \u201cThey also knew that, even though we\u2019re going to build this really nice space, it\u2019s going to sit vacant most of the time \u2014 we\u2019re not getting our return on investment during off hours.\u201d<\/span><\/p>\n

Enter Convene, which rents the digitally equipped space when not in use on behalf of the law firm. The company can also provide catering and tech support for White & Case and others.<\/span><\/p>\n

\u201cWe\u2019re doing everything involved in the operation of that facility, participate in the profits, and get a management fee on top of that,\u201d Holland said. \u201cIt allows them to see a return on their dollars.\u201d Holland declined to provide specific financials.<\/span><\/p>\n

Convene works more with larger Fortune 500 companies that approach the firm early in the calendar year with their events budget, and less with one-off meetings and events sales cycles, Holland said. Clients who have used Convene\u2019s spaces include Adweek<\/i>, Fast Company <\/i>and MUFG Bank.<\/span><\/p>\n

\u201cThere\u2019s an amenities arms race right now. It\u2019s table stakes,\u201d Holland said. \u201cYou have to have all these things if you\u2019re going to have a successful building in today\u2019s environment. The thing that we\u2019ve learned quickly is these landlords don\u2019t want to do it themselves. They\u2019re not really equipped to do it themselves. And, so, if you\u2019re going to do it right, you have to have a hospitality partner.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Picture this: It\u2019s Tuesday at 11 a.m., and your office is abuzz with life, but only when the cameras aren\u2019t rolling. Your company is a tenant at Bell Works, the 2 million-square-foot complex in Holmdel Township, N.J., that was built in 1958 as a research and development facility for Bell Labs, though it\u2019s most known […]<\/p>\n","protected":false},"author":177935167,"featured_media":510073,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"apple_news_api_created_at":"2025-01-28T14:00:34Z","apple_news_api_id":"3318f1d9-d0b4-43c5-9c78-90f72dff5097","apple_news_api_modified_at":"2025-01-28T14:00:34Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AMxjx2dC0Q8WceJD3Lf9Qlw","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"_ef_editorial_meta_paragraph_assignment":"","_ef_editorial_meta_date_first-draft-date":"","_ef_editorial_meta_checkbox_needs-photo":"","_ef_editorial_meta_number_word-count":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[231408,347383050,347384837],"tags":[425199874,598392472,598356624],"industry_type":[598394816,598394835],"company":[598388464,598364639,598395703,598383653,598392135],"market":[425193216,22720,423636225],"sponsored":[],"coauthors":[598390076],"class_list":{"0":"post-510070","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-channel","8":"category-leases","9":"category-office-leases-channel","10":"tag-bell-works","11":"tag-brian-holland","12":"tag-ralph-zucker","13":"industry_type-office","14":"industry_type-flex-office-space","15":"observer_company-convene","16":"observer_company-cp-group","17":"observer_company-inspire-by-somerset-development","18":"observer_company-rxr","19":"observer_company-sl-green-realty","20":"market-national","21":"market-new-jersey","22":"market-new-york-city"},"acf":{"alternative_og_image":""},"apple_news_notices":[],"parsely":{"version":"1.1.0","canonical_url":"https:\/\/commercialobserver.com\/2025\/01\/renting-office-amenity-space\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"The Office Market’s Busiest Side Hustle: Renting Out Amenity Space","url":"http:\/\/commercialobserver.com\/2025\/01\/renting-office-amenity-space\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/commercialobserver.com\/2025\/01\/renting-office-amenity-space\/"},"thumbnailUrl":"https:\/\/commercialobserver.com\/wp-content\/uploads\/sites\/3\/2025\/01\/0092-WEB.jpg?quality=80&w=150","image":{"@type":"ImageObject","url":"https:\/\/commercialobserver.com\/wp-content\/uploads\/sites\/3\/2025\/01\/0092-WEB.jpg?quality=80"},"articleSection":"Office Leases","author":[{"@type":"Person","name":"Zoe Rosenberg"}],"creator":["Zoe Rosenberg"],"publisher":{"@type":"Organization","name":"Commercial Observer","logo":""},"keywords":["bell works","brian holland","ralph zucker","leases","office leases","channel","office","flex office space","convene","cp group","inspire by somerset development","rxr","sl green realty","tacitelli","national","new jersey","new york city"],"dateCreated":"2025-01-28T14:00:11Z","datePublished":"2025-01-28T14:00:11Z","dateModified":"2025-01-28T14:00:11Z"},"rendered":"