Major Developments:Wall Street firms with leases expiring in the near term are searching for new offices, in part because they believe President-elect Donald Trump will reduce corporate taxes and roll back regulations.
Wall Street companies went from occupying 32% of Manhattan’s office stock to 25% in the last four years, during which time TAMI firms have increased from 19% to 24%.
Hospitals in the city are big spenders on construction to update and expand their facilities.
New York University’s new $1 billion academic building will have an all-glass facade that allows neighbors to peer into students’ lives. The university revealed its plans for a 735,000-square-foot building at 181 Mercer Street. Local residents, students and preservationists had opposed the project for years, but a court decision gave it the go ahead. The building is set to open in 2021 and will include a gym, a swimming pool, three theaters and class rooms.
The largest lease in November was a law firm taking up to 206,720 square-feet at 390 Madison Avenue.
Related Companies and Vornado Realty Trust secured a $396 million Deutsche Bank loan to refinance their office building 85 10th Avenue. Related bought the 540,299-square-foot office building, a former Nabisco factory, in 2007 from Somerset Partners for $430 million. Vornado reportedly owns a 50% stake in the property. In 2014, Google leased around 180,000 square feet in the building, which is close to its main New York office at 76 Ninth Avenue. Beyond New York, the bank is struggling with high debt and a possible $14 billion SEC fine over its role in the subprime mortgage crisis.
Extell Development has secured $65 million in financing for a development project in East Harlem. The block-long development site, previously a Pathmark supermarket, is bounded by Third and Lexington Avenues and East 124th and 125th streets. Barnett paid $70 million for the land, including $39 million for the property at 149 East 124th Street from the church-based Abyssinian Development Corp.; $21 million to buy out the supermarket’s lease; and $10 million for a former U.S. Post Office on the block. In October, the city unveiled plans to rezone a large area of East Harlem. Extell could build up to 613,605 square feet of residential, if it includes affordable housing units or community space. The site is also zoned for commercial use.
The borough’s office leasing market continues to slow after its hot streak in 2015 with fewer deals being signed. Many of the big leases that are making headlines are taking longer to close and are often locking in at lower rents.
The former Citicorp Center at 601 Lexington Avenue is the city’s youngest landmark building that now numbers 50 in the Midtown East area. Hugh A. Subbins & Associates designed the 59-story building, which was constructed between 1973 and 1978. Its most distinctive features include its 45-degree roof and the four columns at its base that allow the tower to cantilever over the adjacent Saint Peter’s Church, a design feature that was a condition of the skyscraper’s development.
Columbia University signed Upper East Side rock-climbing gym Steep Rock Bouldering as the retail anchor to its $7 billion Manhattanville campus expansion in West Harlem. Steep Rock will take about 7,000 square feet across three levels at the base of the Jerome L. Green Science Center at the corner of 129th Street and Broadway. Steep Rock’s space includes roughly more than 4,000 square feet on the ground floor with ceilings as high as 45 feet tall. The 9-story, 450,000-square-foot Jerome Greene building is the first to open and the largest at Columbia’s 17-building campus, which is scheduled to be completed by 2030.