Manhattan’s facade
High-profile deals disguise market’s anxiety
MANHATTAN’S
office market could be headed for trouble despite today’s solid-seeming condition and euphoria over big chunks of space being gobbled up by marquee tenants at glamorous new towers.
Commercial brokers with the jitters didn’t want their names used, but one we spoke to worried about a “lack of depth” to the market beyond a handful of large-scale negotiations now going on.
Another noted that, while the high-profile deals believed to be in talks look impressive, most would result in tenants occupying less space than they do currently, due to “workplace strategies” that require fewer square feet per employee.
Last week, SL Green’s One Vanderbilt began “going vertical” with the erection of its first steel beam on a huge site next to Grand Central Terminal. The 1,401-foot-tall skyscraper to be completed by 2020, perhaps the most advanced of all the city’s latest-generation office towers, reflects optimism for the future of Manhattan’s 450-millionsquare-foot market.
At the same time, CBRE reports that overall Manhattan availability climbed to 11.7 percent in the first quarter, compared with 10.6 percent in the yearago period. Meanwhile, JLL notes that 11.7 million square feet of new space will go online through 2020 — with half of it yet to be leased.
One clear-cut expansion being negotiated, we’ve learned, is for Shiseido Cosmetics at L&L Holding Co.’s all-new 390 Madison Ave., where it might take 200,000 square feet compared with its current 76,000 feet at 900 Third Ave.
Another major, unre- ported set of talks is between Pfizer and Brookfield for 600,000 square feet at Manhattan West. Pfizer plans to sell its East 42nd Street headquarters buildings, where it occupies 1 million square feet, by the end of the year.
Meanwhile, hedge fund Third Point is close to completing a lease for 75,000 square feet at Related’s 55 Hudson Yards. Other, much larger potential moves involve Times Square-based E&Y, which is looking for 600,000 square feet at 1 Manhattan West or 1271 Sixth Ave.; Amazon at Brookfield’s 5 Manhattan West; Apollo Investment Group searching beyond its current home at 9 W. 57th St.; and Thompson Reuters, looking to exit Times Square for 350,000 square feet elsewhere.
Those potential deals, as well as others at various locations for Scripps Networks, Accenture, McKinsey and Cahill Gordon, “illustrate that there’s major activity in the market,” one broker said.
“But the question is the lack of demand behind them. There have been a lot of rumors about some banks wanting a million square feet, but nothing concrete. And the truth is that there are not that many deals in the 30,000to 100,000-square-foot range as landlords would like. For all the activity we see involving householdname tenants, it’s a relatively thin market.” Super chef Marcus
Samuelsson conquered Harlem’s dining scene with his celebrated Red Rooster. Now he’s taking his game-changing restaurant show to Brooklyn for the first time.
His Marcus Samuelsson Group has signed a lease to open an eatery of more than 4,000 square feet at The Greenpoint, the nearly completed luxury residential complex rising on the East River waterfront.
No name has been cho- sen yet. Samuelsson’s new fun house will sit at the base of the project at 21 India St. It’s being developed by Mack Real Estate Group and Palin Enterprises, in conjunction with Urban Development Partners. The restaurant is to include an alfresco dining terrace overlookingg the river with a spectacular Manhattan view.
The Greenpoint is a centerpiece of the development boom that’s sweeping the Greenpoint waterfront. It will include a 40story waterfront tower with condo and rental apartments, a five-story rental building, a residents’ courtyard, and 30,000 square feet of amenities. Condo units are to go on sale this week.
Samuelsson wouldn’t say what kind of restaurant he’ll have. But he told us, “Brooklyn has an incredibly rich, dynamic food scene that I personally love and discover a little bit more every time I’m there. ” Kimchi will soon reign where tomato sauce once ruled. Multilevel Korean restaurants are most common on the “Koreatown” block of West 32nd Street. But a major new deal will bring a more upmarket, upstairs-downstairs Korean BBQ eatery to a Soho building previously known for Italian cuisine. Julie Choi has signed a 15-year lease spanning 7,500 square feet on the basement level and first and second floor at 206 Spring St., which was previously home to Fiamma and Costata. The new Korean place will hold more than 250 diners at a time.
Choi is part of a family that’s been in the restaurant business for 70 years. The Chois launched Woo Lae Oak in Manhattan in 1974. Today, the family operates Bann on West 50th Street.
The Spring Street lease was negotiated by Eastern Consolidated senior director James Famularo for landlord Corigin Real Estate Group and by Eastern’s
Ravi Idnani for the restaurant.
Famularo called the “very unique” tri-level space “a chef ’s dream come true,” boasting a fully renovated kitchen and wine room. He said the asking rent was around $100 per square foot on a blended basis, “and we got close to it.”