Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
Upscale business tenants looking for Class A office space in Manhattan, Chicago or Los Angeles will find a wide range of luxury office properties that offer on-site amenities like coffee shops and convenience stores. Now Palm Springs has gone "major metro" with the former Alan Ladd hardware store building newly renovated, reimagined and rechristened "The Five Hundred."
"This landlord was brave to do it. He didn't have anyone lined up in advance and, you know what? They came. We are having, a lot of success leasing (the offices)," said Steve Lyle, broker and CEO for Coldwell Banker Commercial.
Tenants attracted to the property are mostly coming from the financial services sector - a bank, a title company, stock brokerage and insurance. "We had a couple of residential real estate companies fighting for space in that building," said Lyle.
"There's not a lot of Class A (office space) in the City of Palm Springs and The 500 is among the nicest in the valley," said Rob Wenthold, lead leasing agent for the property. So far, two leases have been signed and two more are pending. He expects the building to be full in six months to a year.
"It's a very tight market. The vacancy factor is really low in this one area of the desert," adds Lyle.
Building owner John Monahan never envisioned himself as a landlord. After all, he had enjoyed a successful career in the healthcare industry; but he had always been interested in real estate. "I was scared to death to retire. I retired six years ago - but it took me four years to do it. Initially I bought a spec home in L.A. with a partner and we remodeled that. Then I bought an apartment building here in Palm Springs, then I saw this building and knew I had to have it - but I had no idea it was going to be this big of a project," he said.
Even though he still maintains a home in Agoura and business relationships in Los Angeles, Monahan insisted that the renovation contracts went to firms, in the Coachella Valley. Only the new, high-tech HVAC system had to come from outside. The new system replaces about 30 conventional air conditioning units that were scatted across the roof and throughout the building.
The renovation also added many new windows. "It was very dark before. All the new glass is energy efficient. Every office has a mountain view. There isn't a bad office in the building," he said.
The Five Hundred building, at the corner of Ramon and Palm Canyon, has received its certificate of occupancy and tenants have begun their build-outs, but it won't truly be open for business until sometime in December. The signature amenities include a cafe called Ristretto, a sundry shop called et Alia and a state-of-the-art conference room that can seat 12. Each has its own outside door for public access and will be available for rental to non-tenants. "Suppose someone, who is not a tenant, wants to have a private reception here. We would close the cafe and convenience store to the public, and they could have a reception in the main lobby on Palm Canyon, in the coffee shop, outside in the eating area and throughout the hallway," he said.
Kathleen Bennett, who handles public relations for the property, said that meeting planners are "always asking convention sales staff, 'We want an off-site venue for our cocktail party, where can we go?' "
"We will be making our own pastries, cookies and scones right in the (cafe) kitchen. It'll be more than just coffee and espresso drinks, we're going to have Italian sodas and fruit smoothies. Every (tenant) employee will have their own account...and they can order online from their desk...and we can deliver or they can pick-up," said Monahan.
"The in-house coffee shop will be a definite plus for business - being able to take your clients across the hall as opposed to having to meet them outside," said Rob Severe, general manager for HOM Sotheby's International Realty'sPalm Springs office, the first tenant to sign a lease in the building. "The underground parking and the exposure and proximity to the center of downtown are also desirable."
Ice cream and other frozen novelties will be available at et Alia, along with specialized candies, juices, nuts, magazines and The Five Hundred-branded souvenir merchandise.
The conference room, called The Board Room, will have a surround sound system, facilities for video conferencing, an Apple TV and multiple 60" flat panel displays.
Contemporary waterfalls bookend the twin lobbies at each end of the main floor. The interior decor and common area furnishings are ultra high-tech, yet warm and inviting. The building is listed as having 19,343 square feet of leasable space with a rental rate of $30- to $42-square foot.
No longer to be known as the "Alan Ladd building," The Five Hundred will memorialize the former owner's legacy in two plaques, one in each lobby, inscribed with this message: "Operated by the Ladd family as an upscale hardware store until 2002, The Five Hundred, formerly the Alan Ladd building 1968-2011."
With the paint barely dry on this project, Monahan already knows what is next challenge will be: "I will find another building. Not residential, but commercial - although probably not to this scale. I'll either build something or find another one to renovate. But I want to be in Palm Springs."