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Tim Helmig Quoted in "Northwind’s $65m Jersey City Office Loan Shows Path Forward for Beleaguered Sector"

April 15, 2024
A narrative is emerging for high-quality offices that sit between behemoths like New York’s One Vanderbilt and commodity properties

Preparing for the return

Tim Helmig, a managing partner at New York-based manager Monday Properties, believes the current flight to quality is driving trends in the office market – and will be a key factor for leasing as tenants adopt and implement return to work strategies.

“This flight-to-quality mentality that is driving today’s market presents critical data points that we actively follow and utilize in our long-term strategy for real estate acquisitions and holdings,” Helmig said. “This trend is rooted in previous economic downturns, where investors prioritized stability and reliability, leading to increased demand for prime assets. Investors and tenants are gravitating towards properties with strong fundamentals, including desirable locations, modern amenities and stable cashflow.”

Helmig notes trophy office space has emerged as the primary driver of occupancy gains since the onset of the covid pandemic, citing data from Chicago-based brokerage JLL’s Office Outlook Q4 market report. The report stated that trophy assets in gateway markets are seeing 4.6 percent growth in same-asset asking rent quarter-on-quarter. Additionally, tenant demand has shown consistent signs of growth and is supported by employment growth and shifts towards greater office attendance.

Monday Properties has long been an investor in the office sector and was also an early adopter of hybrid amenity spaces in new developments, with Helmig noting the firm has doubled down on this approach in recent years and has seen the benefit of leasing rates at its Class A properties.

In 2023, the firm executed more than 300,000 square feet in office leases, about a third of which were for new deals. In May, the firm delivered a 12,000 square-foot conference facility and lounge at its property The Towers, located at 1000 and 1100 Wilson Boulevard in Arlington, Virginia. The 20th floor space included views of the Washington monuments and helped spark interest in tours and new deals, he added.

Core to Monday Properties’ strategy is an anticipation of a return-to-office mentality being adopted, Helmig said.

“The latest we’re seeing is that 90 percent of companies plan to implement new return-to-office policies by the end of 2024. As businesses prioritize quality, stability and modern amenities in their office space decisions, prime properties emerge as sought-after assets,” Helmig said.

He continued: “This trend underscores the importance of adapting to evolving market dynamics and leveraging high-quality assets to meet the changing needs of tenants. Moving forward, this intersection will require a strategic approach that aligns with tenant preferences and market trends, positioning stakeholders for success in a rapidly evolving commercial real estate landscape.”

Ryan Simonetti, chief executive and co-founder of Convene, a hospitality company that manages meetings, events and workspaces globally, sees a strong connection between better tenant and user experience levels and the performance of a property.

“We have been tracking data about what this means for value creation and performance, and we have found that for the buildings we are working with, there is better leasing velocity and rents,” Simonetti said. “We know these assets perform better and we know that when owners go to the capital markets, they are able to demonstrate better performance over a longer duration.”