Office developers compete for anchor tenants on Manhattan’s western edge
With only a finite number of large potential renters, the fight for office tenants on the West Side is heating up
With only a finite number of large potential renters, the fight for office tenants on the West Side is heating up
Only a few times in modern Manhattan history has an entirely new office district sprung up all at once. In the 1930s, there was Rockefeller Center; the 1970s saw the World Trade Center complex; and today, developers are planning nearly 15 million square feet of new office space in the Hudson Yards area in the 30s on the Far West Side.
The new projects expected to rise over the next decade include the Related Companies’ North and South towers at Hudson Yards, Extell Development’s One Hudson Yards, Brookfield Office Properties’ Manhattan West and Moinian’s 3 Hudson Boulevard, as well as Sherwood Equities’ 447 10th Avenue and Alloy Development’s 450 Hudson Park Boulevard.
But before starting construction on these new towers, developers must first land an anchor tenant willing to take at least 400,000 square feet of space. With only a finite number of large potential renters, the competition for office tenants is heating up, as some of the city’s top commercial leasing brokers and developers battle each other with slick marketing campaigns and — of course — behind-the-scenes jabs at rival projects.
Many companies are deeply reluctant to move to newly constructed buildings, especially in an untested neighborhood, brokers said. For most companies, it’s cheaper to stay in place and renovate, explained Joseph Harbert, president of the Eastern Region for Colliers International. And some firms fear that moving out of prime Midtown, with its bevy of transportation options, will cause them to lose employees.
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There are currently 10 to 20 companies said to be on the hunt for large chunks of Manhattan office space, brokers said. These include media companies Time Warner, Sony, CBS and News Corp.; law firms White & Case and Skadden, Arps, Slate, Meagher & Flom; advertising firm GroupM; financial giant Credit Suisse; and fashion house Ralph Lauren.
Brokers for the new Hudson Yards–area towers are fighting to lure these tenants, but their efforts could be in vain if companies decide to stay in their current locations, or move to existing office towers instead.
This month, The Real Deal took an in-depth look at the new towers planned for the Far West Side, and how they’re faring in the race to nab tenants.
450 Hudson Park Boulevard
Developer: Alloy Development (possibly with Boston Properties)
Size: 1.1 million square feet
Expected completion date: TBD
Alloy Development is far less well-known than its competitors, and its site is the smallest of those now vying for tenants.
Alloy assembled the site — west of 10th Avenue between 35th and 36th streets — in 2007. The location has been cleared and stands ready for a tenant, but there’s no set development plan in place, according to Alloy president Jared Della Valle, an architect and developer.
Brooklyn-based Bernheimer Architecture drafted a rendering, but the design was created to give tenants an idea of what the site could look like, and is not an active plan, Della Valle said.
“Our opportunity is more build-to-suit,” said Della Valle, noting that the building can support floor plates as large as 48,000 square feet at its base.
Della Valle is working informally on plans for the project with large office owner Boston Properties. The two are each looking for a large tenant for the site, which Alloy could develop by itself or in partnership with Boston Properties, Della Valle said. Boston Properties did not respond to requests for comment.
But Della Valle said he is also entertaining other possibilities, such as selling the site, or leasing it on a long-term basis to another owner or developer.
A leasing team hasn’t yet been hired, although he said Alloy is keeping the brokerage industry “up to date” on the project.
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