Developers are increasingly turning to smaller scale projects to lure big spenders.
Boutique office buildings are currently in vogue, partially because they are easy to fund and don’t require a major anchor tenant. The buildings, which are typically smaller than 200,000 square feet, usually cost $100 million or less to build and can fetch annual rents of above $100 per square foot, Crain’s reported.
Several developers are building or getting ready to build boutique office buildings, including Aurora Capital and Vornado Realty Trust, who plan to build a nine-story office building at 61 Ninth Avenue. The building will feature 115,000 square feet of office space and 37,000 square feet of retail. Nearby, Aurora and William Gottlieb Real Estate are planning a 10-story boutique office tower at 40 10th Avenue. Both projects are expected to cost $100 million and have starting rents for office space of $150 per square foot.
Newmark Holdings’ Eric Gural told the website that he is also considering a boutique office building for an 80,000-square-foot development property at 27 Union Square West. In June, Eliot Spitzer announced plans to build a boutique office building at Hudson Yards. [Crain’s] — Kathryn Brenzel