It was enough to make even a Google employee jealous. Not that Google’s New York offices don’t have their own enviably cool visitors—Stephen Colbert, Lang Lang and Toni Morrison, to name just a few. Employees also get razor scooters. And pool tables. And arcade games. And subsidized massages. And free gourmet meals. And a full-service, full-size dessert truck permanently parked on the eighth floor.

These days, visitors to a New York office are as likely to stumble into a game of Ping-Pong as they are to find suited workers shuffling through a grim landscape of carpet tile and cubicles. Thrillist has a kegerator; building-mate Foursquare has shuffleboard and a beer of the week. Etsy’s Dumbo headquarters blends homemade coziness and high-end design so masterfully it could make an Urban Outfitters executive weep.

Until quite recently, such perks were considered the eccentric luxuries of 20-something tech prodigies, edgy advertising firms and cash-flush startups. Corporate America dismissed the cool office as a fleeting phenomenon. But the wild successes of companies like Google and Facebook have made even the stodgiest CEOs contemplate the potential benefits of video game consoles and French-press coffee. A Ping-Pong table in the middle of your office used to imply that you were run by a 24-year-old. Now a lot of companies want to imply that they’re run by a 24-year-old.

Indeed, the cool office has become a national fixation. And in the country’s collective imagination—an imagination fed by countless magazines, blogs and secondhand stories—it is a utopia of lofted ceilings and abundant natural light, where no one ever seems bored or blocked or fatigued (how could anyone be tired with both a nap room and an espresso machine?), where workers always appear to be seriously having fun, furiously exchanging ideas, or seriously having fun as they furiously exchange ideas. Even the after-work hours are better. Rather than rushing home to drown their sorrows in drink (like some mid-century suburban send-up), workers hang out in their hip, bar-like lounges, knocking back craft brews in celebration of yet another ridiculously productive day of creative cathexis.

In this way, the cool office goes so far as to suggest that the inherent tensions of the workplace—between labor and management, between our authentic selves and our professional selves, between working for love and working for money—can be overcome. It’s a paradise wrought by the Protestant work ethic, where creativity and massive profits can be merged painlessly, a delightful feedback loop in which greater happiness yields greater productivity yields greater happiness—salvation by way of Ping-Pong and Stumptown coffee.

Last October, French beverage conglomerate Pernod Ricard moved into an 82,000-square-foot space at 250 Park Avenue—a buttoned-up 20-story tower in Midtown that has traditionally been a great favorite of white-shoe law firms (Sullivan & Cromwell occupied the space before Pernod).

While the location and the building seemed an obvious choice for a huge international corporation, the distillery-chic space was not: exposed 14-foot ceilings, concrete floors, vast walls of brick and glass, plus a massive bar, a game room (foosball and pool) and huge terraces. If you overlooked the fact that it spanned the 16th through 18th floors of prime Manhattan real estate, Pernod’s office was more suggestive of a craft Brooklyn brewery or one of the many places where the company’s ubiquitous labels (Absolut, Malibu, Jameson, Beefeater, et al.) are consumed than a corporate headquarters.

“They all want some kind of cool vibe,” said Scott Spector, a principal at the Spector Group, the architectural firm that designed Pernod’s space, adding that even law firms and hedge funds are requesting the “factory-meets-art-gallery look.”
While the first cool offices started appearing more than a decade ago—Mr. Spector credited Deutsch advertising with pioneering the use of scooters for intraoffice transportation—there’s now been a fundamental shift in office design. What were once features found mostly at tech companies—open, collaborative areas, kitchens, game rooms—are becoming standard. Even traditional firms that grimace at the idea of clients catching them playing pool still want the hardwood floors and pendant lights.

“Cool has conquered all,” he said.

At the very least, it has helped fuel the growth of places like WeWork—a co-working company that started two years ago with the intention of catering to creative freelancers and startups with less than 50 people. The company now has five offices in Manhattan, with two more on the way at (Bryant Park and 222 Broadway), and three in California. And while some of that growth is connected to the thriving startup scene and the dissolution of the traditional economy—freelancers needing places to work—the company is increasingly being asked to accommodate larger companies in a range of industries, from modeling agencies to nonprofits.

“I definitely think that there is something that makes you feel more excited to come here in the morning and stay late at night,” WeWork co-founder Miguel McKelvey told The Observer when he took us on a tour of the company’s Varick Street offices in late February. Weak winter sunlight flooded through the 105,000-square-foot space. Decorative items were scattered about—a vintage bike here, a typewriter there—banishing the impersonal barrenness that is a hallmark of so many offices.

He pointed out a paper shredder that had been covered in a purplish-gray floral print.

“We thought, ‘We can’t put that super-ugly gray box in here,’” Mr. McKelvey said. “We would never stand for the ugliest, easiest solution. We always try to analyze things and say, ‘How can we make this look cooler?’”

A decade ago, workplace innovation revolved primarily around where people worked. Working remotely was all the rage, and “being able to work in your pajamas” was talked about as though it were one of the great hopes of humanity that could finally now, through the miracle of technology, be achieved. Companies contemplated the cost-
saving potential of vastly reduced work spaces, and workers welcomed the end of commuting and simpler child care arrangements.

But like other work-space panaceas before it, telecommuting proved less than revolutionary. (It’s worth noting that the cubicle, maligned though it is today, was seen as an innovative solution to the problems of the modern office when it first debuted in the 1960s.)

“Now innovation is all about what’s cool,” said Lenny Beaudoin, a senior managing director of CBRE’s global corporate services. Mr. Beaudoin, a workplace strategist who helps the real estate company’s clients revamp their workplaces to enhance productivity, is currently working with a number of traditional companies (a large bank, a San Francisco law firm) that want to create “cooler,” less traditional offices in happening neighborhoods.

“The new office is part hospitality, part retail. People work 24/7, and they want their workplaces to appeal to their lifestyles,” he said. “The idea of going into a high-rise and sitting in a cubicle all day, the tyranny of the traditional office, that’s going away. It’s about lifestyle integration.”

And why shouldn’t it be? Given that the BlackBerry has long since sullied the domestic sphere, aren’t we entitled to comfortable furniture and good lighting in the public sphere? Even the idea of the domestic versus the public sphere sounds quaint, a Victorian concept burnished in ’80s academic conferences more than something resembling the lived experience of professional workers in 2013.

Google has been criticized in the past for using its admittedly amazing amenities to lure workers into longer and longer days at the office. But its offices remain the envy of workers everywhere, because many Americans aren’t offered any trade-offs for their devotion to their desks, let alone a package of lavish, extravagant ones. The modern office is transforming into a worker’s everything—the place where she not only works, but eats, exercises, relaxes and socializes.

“A home away from home,” is how ZocDoc director of people Karsten Vagner describes the website’s Soho offices. Which struck us as slightly misleading—how many New Yorkers’ neglected apartments have two fridges and a freezer stocked daily with healthy snacks? Which is to say nothing of a game room and a hammock flanked by blow-up palm trees.

“More than once I’ve heard parents say, ‘Is this real?’ when they see the hammock,” said Mr. Vagner. “I brought my dad into the office last week. It was the first thing he wanted to do when he got off the train.”

Speaking with Mr. Vagner and company spokeswoman Jessica Aptman, it was striking how happy they sounded. When we grumbled about yet more snow in March, they told us how everyone at the office was Instagramming the snow from the office’s big windows.

“I think that people can change a company and a space can change a person,” said Mr. Vagner. “I know that if I’m sitting on my yoga ball and I can see other people, if I have plants or action figures on my desk, I’m going to be a lot happier and more productive than if I was isolated in a dark cubicle.”

Still, some of it seemed a little silly. When did workers really need a hammock?

“When don’t you need a hammock!” they exclaimed in unison.

Just the prospect of moving to a cool office is enough to make some workers giddy. Ryan Alovis, the CEO and founder of ArkNet Media, a midsize Long Island startup, was surprised at how psyched his 16 employees were when he told them they’d be ditching their traditional office in Valley Stream for a hip, college-campus-like complex in Garden City.

“They’re so hyped up, everyone’s freaking out,” he said. “I walked by my VP of operations and he showed me a pool table that they have at L.A.’s Hard Rock Cafe that he wanted us to get—every time you hit a ball, it either reveals a girl in a bikini or it looks like a ball of fire. The other day, someone showed me a robotic bar.”

There will not be the bikini/flame pool table or a robotic bar at the new office, but there will be a normal bar, a fitness center, a “coffee center, not just coffee,” a juicer and pizza parties. “You have to wow people,” said Mr. Alovis. “A juicer, a fitness center, a cafeteria—people expect this now. Tech workers are the new rock stars.”

And they have the Rock Band setups to prove it.

It should not come as a surprise that corporate America—its once-promised financial security and career stability having vanished—would be drawn to the cultural blueprint and anti-status ethos provided by tech. While tech’s DNA is fundamentally capitalist—create something new and make a lot of money selling it—the industry proved that it could not only make money and be cool at the same time, but that it could make money by being cool.

By following the path that tech forged, companies have an opportunity to remake their images along with their offices. Now companies talk endlessly of creating interactions, of CEOs getting right into the mix of things, of ideas circulating and flourishing in their open floor plans. As though we were all creative geniuses or industry trailblazers and office drudgery were a thing of the past. As though we could wipe out the thankless, unglamorous tasks that make up the entirety of some jobs right along with bad fluorescent lighting.

The cool office sells not only an image of a creative hotbed to clients, but perhaps more importantly, to employees. It invites them to see their job as a form of self-expression rather than rote labor, granting flexibility in exchange for loyalty and long hours. And worker bees have responded enthusiastically, taking to Instagram and Twitter to brag about their amazing workplaces. Some even pen boastful CNN iReports, like the recent one by an MKG employee that started “Our office is our playground” and described taking “goofy group shots” in the office photobooth.

There is something vaguely unsettling, though, something overwrought about the descriptions of all the fun being had: the Tuesday-night runs that “take off from the office and end at a local pub,” the spontaneous exercise breaks where employees can be found “shaking the sillies out in a no-judgement zone,” the craft nights with wine and cheese where everyone makes “holiday themed cards, or mugs, or whatever strikes our fancy!”

Is day-to-day office life really so thrilling that a photobooth is needed to capture all the precious moments? Since when is any workplace a no-judgement zone? (And why should it be?) Moreover, who really wants to sit around making mugs with their co-workers?

There is a cult-like undertone in this all-encompassing existence, in the blurring of lines between home and office, between personal time and work time, between employee and self. The cool office works to disguise the very basis of the relationship between company and employee: the exchange of money for work. Work is a lot of things, but this is its fundamental essence.

As architect Sam Jacob recently wrote in Dezeen, the rise of the fun office can be seen “as a denial of the very real power structures inherent in labour relations.” And “even more fundamentally sinister is the idea of work colonising the real spaces of intimacy and freedom: when your office resembles all the places that you go to escape work, maybe there is no escape from work itself.”

But for better or worse, Americans have always embraced that “you are what you do.” The idea that “you are where you work—literally” is new. For many of us, the cool office ministers not only to our immediate needs, but also to our fantasies: fantasies about the kind of people we would like to be, the jobs we wish we had, the lives we wish we were leading. We might not land that dream job, but the dream office could be within reach!

And yet, as much as the cool office can seem to matter, it can also matter very little. Of the many conversations that The Observer had with the haves and the have-nots of the office world—in the twinges and, okay, flashes of envy we sometimes felt—our thoughts returned frequently to what a Google engineer said to us, after describing a Vermont ski weekend the company had taken him on, Lang Lang’s visit, and a lunch of expertly prepared salmon and roasted Brussels sprouts: “At the end of the day, whether you enjoy your job or not is more important than getting roasted Brussels sprouts.”

But, he added, just so long as we were writing about cool offices, we should know that as good as New York’s Google headquarters are, “the truly awesome stuff is in Mountain View.”

kvelsey@observer.com

Even more temporary office space to come. (Courtesy Property Shark)

The firm will be relocating from 11 Penn Plaza, where the retailing giant Macy’s is expanding into the space it will leave behind.

Regus will take floors 17-18 at 112 West 34th Street, a 26-story, 770,000-square-foot asset owned by Malkin Properties. The firm has committed to the spaces--at 28,000 and 23,000 square feet respectively--for 15 years. Rents start in the mid $40s per square foot.

A spokesman for Regus confirmed the deal and said that 112 West 34th Street was an ideal location because it was nearby its offices at 11 Penn Plaza, making the move more convenient for its tenants while remaining close to Penn Station, a central transit hub.

“We want to retain as many tenants as possible in the move and stay close to Penn,” the spokesman said. “The 11 Penn location is almost fully leased.”

Regus rents offices and then partitions the space for smaller users such as start up companies or even individuals who would like to lease a single work station.

“Many of our tenants are firms that are starting out and want flexibility,” the spokesman said. “It’s a great way to enter the market because we allow tenants to easily shrink or add space.”

Lately the concept has appeared to gain steam in the city amid lingering economic problems that have cast swaths of the workforce into the job market and spurred some to start their own business or embark on a more entrepreneurial career path.

As The Commercial Observer reported yesterday, WeWork, another office suite provider, just committed to about 75,000 square feet at 175 Varick Street where it will open its fourth location in the city. According to WeWork’s chief executive, Adam Neuman, the firm has taken almost 200,000 square feet in under two years.

Regus is one of the largest office suite companies with 20 locations in the city and over 1,200 in 92 countries worldwide. The company has opened a number of offices this year in Manhattan, at 99 Hudson Street, 41 Madison Avenue, 600 Third Avenue, 77 Water Street and 477 Madison Avenue its spokesman said and looking for more space in which to expand next year.

Mitch Arkin, an executive at the brokerage firm Cushman & Wakefield, leades a C&W agency team that represents Malkin Properties at 112 West 34th Street. Mr. Arkin could not be reached for comment. Regus is represented by a CBRE team headed by broker Mark Ravesloot. Mr. Ravesloot also could not be reached.

Macy’s will take up the the roughly 60,000 square feet that Regus will be leaving behind at 11 Penn Plaza. In that deal, Macy’s will lease the roughly 1.1 million square foot building’s fifth floor, expanding its already huge presence in the property to about 600,000 square feet sources say. Macy’s will pay rents in the $50s per square foot for the space, which it will take through 2020 to match the existing term of a portion of its lease in the building. 11 Penn Plaza is owned by the real estate investment trust Vqornado and represented by one of Vornado’s in house leasing executive Glen Weiss. Mr. Weiss couldn’t be reached for comment.

Dan Geiger, Staff Writer, is reachable at DGeiger@Observer.com

In just over a year, WeWork had opened three thriving locations, in midtown, Soho and the meatpacking district. The company leases offices, then prepares the facility for smaller tenants and rents out the space on a desk-by-desk basis.
Though there are several companies in the city in what is known as the office-suite business, WeWork has created a distinct concept by constructing space with open floorplans and glass partitioning, a layout that fosters interaction between the tenants.

The fourth of many new WeWork outposts to come?

“I don’t look at us as in the real estate business,” the company’s founder and chief executive, Adam Neuman, said. “We feel we’re building a physical social network, a new type of ecosystem. Thirty percent of our tenants end up doing business with each other.”

At a time when the nation’s weak job market has prompted a rise in entrepreneurship—particularly in talent-rich markets like Manhattan—WeWork’s space has been in hot demand. Mr. Neuman said that of the roughly 115,000 square feet his company leases in midtown Soho and meatpacking, virtually all of it is full. With a six-month waiting list of tenants clambering to get in, he knew it was time to open a fourth location.

In recent weeks, Mr. Neuman made his boldest move yet when WeWork inked a 75,000-square-foot deal at 175 Varick Street, its largest lease to date. On the surface, the deal looks like a breakthrough for all involved. WeWork will now have a location in Hudson Square, an office neighborhood that in recent years has begun to increasingly draw an influx of media and creative tenants, a segment of the economy that Mr. Neuman feels is vibrant with the kind of start-up ventures that will populate his space.

Meanwhile, Extell Development, the owner of a leasehold interest in 175 Varick Street, shored up most of the 150,000-square-foot building’s vacancy in the deal.

Yet Mr. Black, an executive who handles WeWork’s real estate transactions in the city and negotiated the firm’s lease at 175 Varick Street, spoke of the complexity and other hurdles involved in arranging the deal. WeWork’s search for a fourth New York location stretched on for six months, he said, a relatively lengthy time period that took as long as it did in part because many landlords Mr. Black contacted were hesitant to take the firm on as a tenant.

For owners, one cause of concern is the amount of traffic an office-suite user can bring to a property, potentially disturbing other tenants. Often, issues boil down to security, Mr. Black said.

“It’s often a matter of control,” Mr. Black said. “Landlords want to know who’s coming in and out of their buildings.”
WeWork had gotten around the problem in the past simply by finding properties that it could lease entirely. Full building leases are not common, however, and in order to accomplish its goal of leasing 75,000 square feet, WeWork knew it would have to be open to finding a way to integrate its operations into a multitenanted building.

Mr. Black said that he began investigating off-market opportunities to see if he could find a fit. When he found 175 Varick, he quickly knew the location was promising. Working with the building’s agents, a team from the real estate firm Colliers International led by company executives Martin Meyer, Eric Meyer, Richard Plehn and Seth Hecht, Mr. Black helped negotiate and devise a plan to convert the building’s freight entrance into a new lobby that WeWorks could use as a private, dedicated entrance.

With that accommodation, Mr. Black and the Colliers team reached a deal to have WeWork take several floors in the building­—three, four, five and eight—each of which is about 15,000 square feet for rent in the $30s-per-square-foot range. Not all of the floors are immediately available and WeWork will take possession of the floors over the next year as they become vacant. New York State tenants, for instance, occupy a portion of the space; the Council on the Arts has offices on floors two and three; and the New York State Lottery occupies the fifth floor.

“The structure works for us because we build most of the space out ourselves with our own crew of builders,” Mr. Neuman said. “Getting it step-by-step allows us to focus on one portion at a time and build it out to the high standards that we have.”

WeWorks will be installing a 4,000-square-foot lounge in its new lobby, a space where tenants can get food and coffee and mingle with guests or each other.

“The lounge area immediately sets the kind of tone for the atmosphere WeWorks provides and getting that was a key part of the deal,” Mr. Black said. “It shows how communal and creative the space is.”

WeWorks will also receive outside signage that will allow the company to stamp its brand on the building.
Mr. Black had an ace up his sleeve through the negotiations, which helped him not only get WeWorks into the property but hammer out such a favorable deal as well. Extell Development, it turns out, had been eager to do a large deal because it was interested in selling its leasehold on the property. The cash flow that WeWorks will provide is bound to make the building a more compelling acquisition to potential buyers. Sure enough, in the weeks after the lease was signed, the owner has put the property on the market using a sales team from Jones Lang LaSalle.

“I try to do my due diligence in any leasing assignment and we had quietly heard that Extell was hoping to do a lease,” Mr. Black said. “You look for every advantage that you can for your tenant.”
dgeiger@observer.com

Extell's Gary Barnett Trying to Unload Varick Investment.

Gary Barnett, Extell’s chief executive and one of the city’s busiest developers, has tapped a team from Jones Lang LaSalle to market the property. Richard Baxter, a JLL executive, is handling the sale of the leasehold interest.

Mr. Barnett, who is also in the process of raising a soaring new hotel and residential tower on 57th Street, owns a 99-year leasehold of 175 Varick—which means that he controls the building but doesn’t own the land underneath.

The building had previously been owned by the Lehman family, which used the property to operate a printing business. Many buildings in the Hudson Square neighborhood  where 175 Varick is located are former printing facilities that were eventually converted over to office use as the neighborhood began to attract media, technology and creative tenants. The Lehman family continues to own the land that the property sits on.

Mr. Barnett will be selling the remainder of his leasehold, which continues for another 92-years. The leasehold interest gives the buyer ownership of the building, but subjects the owner to rental payments to lease the land from the Lehmans. In 92-years, the building will revert back to the Lehman family’s control, or whoever owns the land at that point.

Earlier this month, Extell inked a 75,000 square foot, 15-year lease at 175 Varick with WeWork, a tenant that leases space to small office users.

A team from JLL led by Sean Black, a leasing executive at the firm, represented WeWork in the deal. Colliers International brokers Eric Meyer, Richard Plehn and Seth Hecht were Extell’s agents for the building.

Mr. Baxter estimated that the property could trade for as much as $40 million. Even though the lease with WeWork stabilizes the building’s cash flow, Mr. Baxter pointed out that there is still upside potential in the investment if a buyer fills two floors that remain vacant in the property. He estimated that an investor would buy into the property at a roughly five percent rate of return and that the yield could then be raised to seven percent once the building’s remaining vacancy was then leased.

WeWork Labs is seeking 50 entrepreneurial types with the goal of building a strong community with a diverse stable of talent, said Matt Shampine of Simande and We Are NY Tech, who is collaborating on WeWork Labs with WeWork's director of Technology, Kyle O'Keefe-Sally, and GetMinders founder Jesse Middleton.

WeWork Labs will be run democratically--Mr. Shampine likened it to a co-op--and residents will get a desk, WeWork membership, the standard IT utilities and access to a food-stocked fridge at an affordable price. Residents will be selected to optimize the mix of skills and talent in the WeWork Labs, which will occupy a floor at the SoHo location. Everyone works on their own startups on freelance work for the majority of the time, but the space will be structured to foster as much inter-startup collaboration and innovation as possible.

"We really just want to bring really awesome, talented people together and help them both succeed in their own projects and companies but also contribute to the community as a whole, with either side projects or just helping others with their work," Mr. Shampine said.

In theory, the new initiative will bolster New York's entrepreneurial community as well as WeWork's.

"Jesse and I really believe that in order for New York City to take that next step forward, we're going to have to all rely on each other," he said. "It'll be awesome having a UX person, iPad developer, iPhone developer, web developer, and a copywriter in a room together. Say we order dinner one night and we all sit around talking--guaranteed there will be like 90 things we want to build by the end of the eating. And the coolest part is that we're going to have everyone in a room together that can actually build it or solve a particular problem."

WeWork Labs is not a prank, founders said, despite its April 1 launch date, and The Observer was promised more details would be forthcoming between now and South By Southwest Interactive, which takes place March 11-16. "Look for some serious NOISE at SXSW around WeWork Labs," O'Keefe-Sally said in an interview on We Are NY Tech today.

WeWork is also building internal productivity software called WeConnect, and will be opening a location in the Meatpacking District and one in San Francisco  in addition to the existing SoHo and Midtown locations soon.

ajeffries [at] observer.com | @adrjeffries

The nighttime coworking event, WeWork After Dark, will take place at a regular interval, still to be determined. But tonight you can swing by the WeWork Lounge at 177 Lafayette St., starting at 9 p.m. and going until whenever.

WeWork's first After Dark is free, and we heard there might be pizza. More information on Twitter.

New York Night Owls is another latenight coworking club that meets from midnight to 4 a.m. at New Work City.

ajeffries [at] observer.com | @adrjeffries