Landlords in New Jersey are adding top-notch cafeterias, co-working spaces and fitness centers in standalone buildings to appeal to today’s workforce.

From barista bars and fitness centers to walking trails and conference facilities, office landlords in suburban New Jersey are racing to upgrade properties with millennial-friendly amenities.

Older buildings are being overhauled all over in the hopes of attracting tenants with workforces that otherwise might flock to urban locations with easy access to hip restaurants and trendy shopping. In some cases, landlords are even outfitting separate amenities buildings.

Such improvements have become essential in a market that for 30 years has seen little new development, according to owners and brokers.

The first-quarter overall office vacancy rate for Northern New Jersey was 19.7 percent, and average asking rents rose 7.2 percent to $30.13 in the first quarter, with some markets seeing significantly higher numbers — in Parsippany, for example, vacancy hit 30.5 percent, according to Cushman & Wakefield’s Northern New Jersey MarketBeat. By contrast, on the more urban Hudson River waterfront, vacancies clocked in at a lower 17.6 percent, and in Newark, at 16 percent.

“Without [amenities], you don’t rent,” said Robert Rudin, vice chairman and director of consulting at Cushman & Wakefield. “You’re dealing with buildings that are 20 to 30 years old that need to be fixed. If you don’t fix them, people aren’t interested.”

Essential office amenities

On the must-have list are upgraded cafeterias, fitness centers, state-of-the-art conference areas and outdoor athletic and leisure facilities.

Also de rigueur are Wi-Fi-enabled lounge areas with coffee bars, natural light and comfortable seating where employees can plunk down on couches with a laptop or collaborate with co-workers.

But the new digs can’t be ordinary in look or in function. Tenants are looking for completely overhauled, sparkling new places to meet, eat and work out.

“Cafeterias have to look like a cafe in [downtown] Montclair, and the fitness center has to look like a high-end health club,” said Rudin.

For tenants, amenities are a perk they can offer younger employees who are looking for more of a work-play-live lifestyle. “The experience of going to work is different from just three or four years ago,” said Ross Chomik, managing partner of Vision Real Estate Partners. “As much as we are competing with other office buildings for tenants, companies are competing for talent.”

For owners, amenities are a value-add that can be reflected in the rent. In Florham Park, at a six-building complex known as Park Avenue at Morris County, rents have gone up about 10 percent since owner KBS Realty Advisors embarked on a series of improvements, said Jeffrey Heller, a principal and managing director at Avison Young, which represents KBS. Those improvements include fitness, yoga, meditation, stress management and nutrition classes, massage therapy, basketball and volleyball courts and a concierge service that can arrange for services such as dry cleaning, auto repair and even auto detailing.

“Owners and investors have realized they have to differentiate [their buildings] from commodity stock,” said Heller. “Those who have done that have outperformed.”

Speeding things up

Amenities are also helping to lease space more quickly and attract high-caliber tenants.

“[The amenities are] reflected more in the speed with which we lease up and the quality of firms to which we lease space,” said Michael Seeve, president of Mountain Development Corporation. “When tenants are thinking about space, there are always options. An amenities package helps put us at the top of the list and gets space leased sooner.”

In 2012, Mountain Development bought the 434,000-square-foot 56 at Roseland from Merck & Company, and since then it has improved existing facilities and added new ones. Today it has an event and conference space, a full-service cafeteria, a fitness center and an outdoor patio with a firepit, among other amenities.

Vacant at the time of purchase, the building today is nearly fully rented, said Seeve.

The amenities strategy has also been a win for Vision Real Estate Partners and Rubenstein Partners. In 2013, in a joint venture, the developers bought the Crossings at Jefferson Park — a 65-acre, three-building site — for $25 million. The JV spent more than $10 million revamping it, including outfitting a separate 11,000-square-foot amenities building, known as the Powerhouse, which houses food services and a health and wellness center.

“Once the hammers started swinging, it led to a significant amount of leasing — 150,000 square feet in a little under a year,” said Steve Card, a principal at Rubenstein Partners. “Once we delivered, tenants lined up.”

Last year, tenant Barclays Capital bought the amenity-laden complex for $69 million. The financial services company is now layering on another round of tenant-friendly features.

The success of the venture convinced the partners that amenities were the way to go. Now two more makeovers are in the works.

At the five-building, 820,000-square-foot Warren Corporate Center — bought in 2016 for $136 million — they are again building a standalone amenities center, a 20,000-square-foot space that will contain a food court, conference facilities and a fitness center. Outside are walking trails and basketball and volleyball courts.

In Parsippany, Rubenstein Partners and Vision Real Estate Partners scooped up the 700,000-square-foot former Morris Corporate Center IV, rebranding it as Latitude. Among other amenities, it will feature a “winter garden” joining two buildings and offering fitness facilities and bicoastal-themed food.

What kinds of extravagant amenities office owners will dream up next remains to be seen, but it’s clear there’s no going back.

“With amenities, rather than being the wave of the future, it’s almost like catching up,” said Card. “A lot of people are thinking along the same lines. To stay ahead, you have to do something different.”