When Steve DeLuca commutes to work, he takes a quick elevator ride from the apartment he shares with his wife and their two toddler children at Optima Signature in Chicago’s Streeterville neighborhood. Unlike many people, Mr. DeLuca isn’t new to working from home. He’s been doing it for more than a decade.
“I used to rent space at a WeWork, but the opportunity to lease a private office in our apartment building is far more attractive, especially now,” Mr. DeLuca , 43, a founder of a private equity real estate fund, said. “I can be home at a moment’s notice and I can also take an elevator to go back to the office at night when I need to.”
These days, Mr. DeLuca shares his private office with his wife so she can work quietly from 4:30 a.m. to 11:30 a.m. while he takes care of their children. Occasionally, the children join their parents in the 500-square-foot office, which they rent for about $1,200 per month, for a change of scenery from their apartment. The office comes with high-speed internet, office furniture and a small refrigerator.
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A Perk for Condo Owners
When social distancing guidelines shifted the workplace to home, luxury apartment and condo developers recognized the desirability of a remote office in their developments.
“I’ve been working out of my own home office these last few months and realized how much I need privacy while I’m on conference calls and Zoom meetings,” said Ophir Sternberg, founder and CEO of Lionheart Capital, developers of the Ritz-Carlton Residences, Miami Beach. “At the Ritz-Carlton Residences, which is almost sold out, we have suites that residents can buy to use as a nanny suite or for guests. We quickly realized that these suites would also be perfect for a private office. We’ve sold four of seven already.”
The suites at the Ritz-Carlton Residences, which range in size from 460 to 560 square feet and are priced from $580,000, have floor-to-ceiling windows facing a meditation garden.
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“Some of the buyers use these offices in the morning, then head to their apartment for lunch and then work a little more before they go out on their boat,” Mr. Sternberg said.
The suites, which were designed by Piero Lissoni, include a terrace, a kitchenette and a full bathroom with Boffi fixtures.
“This pandemic changed the way people think about their workspace, so I’ll definitely incorporate more private offices in my future projects,” Mr. Sternberg said. “We’ve had workspaces in our condos before, but buyers love the fact that these are 100% private.”
At Turnberry Ocean Club in Miami, where residents are expected to move in this fall, two private suites, one with 370 and one with 480 square feet are available for condo owners to reserve for use as a remote office.
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“Ultimately, we want our residents to feel like they are living in a five-star hotel and that’s how these suites are designed, too,” said Jim Cohen, president of residential development for Fontainebleau Development, developers of Turnberry Ocean Club. “Our clientele includes lots of people who work remotely and expect a home office, so this is just one more private remote location for them to use. We also have an executive boardroom that can be reserved for conference calls or webinars.”
Residents at Turnberry can reserve the office suites at no cost for a few days or weeks, provided the space is available. Another option at Turnberry is to purchase one of the 31 cabanas that range in size from 230 to more than 400 square feet and can be set up as a poolside or beachfront office. The price range for the cabanas has yet to be determined.
“The cabanas have Internet access, summer kitchens and terraces,” Mr. Cohen said. “A larger cabana with 435 square feet includes two levels with a terrace and a Jacuzzi. In today’s world, no one knows where you are while you’re working, so with these cabanas you can lay on the beach or go for a swim between meetings.”
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Emphasis on Privacy Over Co-Working
Co-working spaces are common in upscale apartments, but private offices are anticipated to become a desirable perk in new buildings due to the prevalence of working at home.
Optima, based in Chicago and Scottsdale, Arizona, has been ahead of the curve, including office suites for lease in their residential buildings for 15 years.
“We added a few office suites to an Optima building in Phoenix in 2005 and they were so popular, we’ve included more in our buildings ever since then,” said David Hovey, Sr., CEO of Optima, developers of Optima Signature in Chicago, which has 23 office suites available to lease to residents and nonresidents. “Small business owners like them because everything is turnkey and we include furniture, window treatments and a refrigerator in the suite. In addition, the office tenants have access to the recreational amenities in the building like the swimming pool, fitness center and party room.”
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About one-third of the offices at Optima Signature are rented to residents. The suites range from 100 to 1,000 square feet and rent for $500 to $2,500 per month with an annual lease.
“Office suites are a nice amenity for residents and they also provide functional use of spaces on the ground floor facing the street or an interior courtyard that would be less desirable for a residence,” Mr. Hovey said. “They have natural light and floor-to-ceiling windows and a nice view, but their location in the building is more suitable to an office.”
At the Savoy, an apartment in Sunnyvale, California, and at the Lynhaven, an apartment complex in San Jose, California, both under development by Greystar and scheduled to open this summer, co-working spaces are being reconfigured to allow for some private offices.
“Between the need for social distancing and the fact that more people are working at home, we realized that we need to diversify our options for residents,” said Bradley Davis, senior director of operations for Greystar. “When we open phase two of our new apartments this fall, we’ll include small, closable private offices off the main coworking area that residents can reserve for a nominal fee.”
The offices will range in size from a pod for a private phone call to a larger space for working without noise interruptions. They will be reserved for $100 to $150 for three or four hours, Mr. Davis said.
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“We’re designing these office spaces to be more flexible and looking to potentially add more separation within co-working spaces, too,” said Andrew Morcos, senior director of development for Greystar. “I don’t think we’ll see a wholesale change to amenity spaces, but we’ll definitely use this as an opportunity to add flexibility. We know one of the top amenities renters are looking for now is private office space either in their apartment or in the building.”
At 2177 Third, a boutique condo in San Francisco’s Dogpatch neighborhood scheduled to open later this summer, residents will be able to reserve the co-working space for private use for $75 per hour or $250 for four hours.
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“Ever since my employees started working from home during Covid-19, I’ve been aware of the distractions from barking dogs and babies, so we’re likely to see even more private offices in residential buildings in the future,” Mr. Hovey said.
Private offices are likely to become more important as working from home continues to be a more common option, said Jillian Fiske, general manager of 2177 Third with Action Property Management.