| NYguy |
Mar 29, 2018 12:13 AM |
http://rew-online.com/2018/03/28/slo...own-goes-solo/
Slow-motion change as East Midtown goes solo
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BY KYLE CAMPBELL
MARCH 28, 2018
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East Midtown rezoning got its biggest endorsement to date last month: buy-in from one of the neighborhood’s oldest and most important corporate occupants, JPMorgan Chase.
.....In February, JPMorgan announced its plan to demolish its current headquarters and replace it with a new 70-story, 2.5 million s/f tower. As the first project to use the new zoning, the bank’s headquarters sparked a renewed excitement in Midtown East.
“It’s the single biggest piece of news we’ve had for Midtown post-One Vanderbilt in terms of what it’s going to do positively for the marketplace,” Cushman & Wakefield Global Brokerage chair Bruce Mosler said, adding that he expects more development opportunities to crop up this year.
In conversation with Mosler during REBNY’s spring lunch last week, Brookfield senior managing partner Ric Clark said citywide demand has shifted toward new construction. For Midtown East to remain competitive, owners either need to renovate or rebuild, he said.
“All this development has created a nuclear arms race when it comes to redeveloping old buildings, (there are) 40-plus buildings that are going through very substantial capital modifications so they can compete,” Clark said. “On Park Avenue, a lot of those buildings don’t lend themselves to that, so what JPMorgan Chase did is great. I know of two large corporate tenants that would love to do something like that on Park Avenue.”
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https://commercialobserver.com/2018/...revive-or-die/
As Midtown Looks to Compete in a New Manhattan Market, It’s Revive or Die
Hudson Yards has changed the game for the city’s office landlords. In Midtown, developers are being forced to emulate and recreate to stay relevant.
https://nyocommercialobserver.files....9515.jpg?w=765
BY REY MASHAYEKHI
MARCH 28, 2018
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For the past few years, the developers, landlords and brokers who constitute the stakeholders of the Midtown Manhattan commercial real estate market have been barraged by waves of conjecture, speculation and hype. On earnings calls, panel debates and in the papers, they’ve been confronted with statements and observations that are, by now, extremely familiar: “Manhattan’s center of gravity is shifting westward.” “Today’s office tenants want new space in cool, hip neighborhoods.” “Midtown South and the Far West Side are now the city’s most desirable office markets.”
It’s all had the effect of painting a rather forlorn picture for Midtown, which today remains the world’s largest central business district and, in many respects, the dominant, bustling hub of commerce in New York City, from Times Square to Rockefeller Center to Grand Central Terminal. With more than 240 million square feet of inventory and 179 million square feet of Class A product, according to Cushman & Wakefield data, it is by far the greatest concentration of office space in the city.
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“The millennial generation has spoken: They want [offices with] light, air, amenities and column-free efficient space,” said Bruce Mosler, C&W’s chairman of global brokerage. “Businesses today respond to what the workforce wants and not where the CEO lives. To be successful, they have to be in the locations and property types that attract the millennial generation.”
The task for Midtown landlords then is finding a way to make their existing product more competitive against the challenge of the West Side’s rising citadels. The property owners who will continue to do well in Midtown, sources said, are those who will invest the resources into making their 20th century office buildings attractive to the needs of 21st century tenants.
“One thing that’s clear and evident, and Hudson Yards bears it out, is that tenants want new,” David Berkey, an executive vice president and director of leasing for L&L Holding Company, told CO. “They want modern workspaces—they can no longer live in these older workspaces—and there’s only a finite amount of [new space] getting built.”
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One Vanderbilt is rising only a few blocks south from 270 Park Avenue, where J.P. Morgan Chase will be tearing down its existing headquarters building and developing a new 70-story, 2.5-million-square-foot skyscraper, the banking giant announced in February. That endeavor is being aided with air rights acquired by J.P. Morgan through new parameters enabled by the Midtown East rezoning—a regulatory shift that many have touted as imperative in enabling developers to rebuild and renew the aging office stock in the area.
“I think it’s definitely forced landlords to take a good, hard look at a specific asset and whether it makes sense economically [to redevelop],” Fisher Brothers Partner Ken Fisher, whose firm owns five office buildings in the Midtown East area, said of the rezoning. “It gives us the ability to knock [buildings] down and rebuild, if that’s what we want to do.
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