The CEO at commercial landlord Brookfield Office Properties said the firm could lease as much as 50 percent more office space this year compared with its best year ever.
On top of approximately 3 million square feet leased in the first quarter, “we could add another eight to nine million square feet of leasing this year, giving us something like 11 to 12 million square feet. That’s 40 to 50 percent better than our best year ever,” company CEO Ric Clark said. The firm has an interest in 109 office properties globally with 78 million square feet of space.
Clark was speaking today at the National Association of Real Estate Investment Trusts conference in Midtown.
Although the office leasing market is improving in Manhattan following the downturn, Clark did not expect new leases signed at its World Financial Center Downtown to start at the same level as those now paid by financial services giant Merrill Lynch.
“We expect, on average, when the job is done [we will] come close to replicating the rent to replace Merrill Lynch. We may be a couple bucks off that, with the starting rents, but the average rent should be above that. Certainly the earlier deals we will do for lesser economics,” Clark said.
But he was confident enough to tell reporters after the presentation that the World Financial Center will be fine even if Japanese financial firm Nomura leaves. The firm occupies about 600,000 square feet but is negotiating to take as much as 900,000, he said.
“We think we can pretty easily replace them,” he said.
As for Brookfield’s development site over the rail yards on the West Side, between Ninth and Dyer avenues, and between 31st and 33rd streets, where the company announced a few months ago construction would resume, Clark said. The site is east of Related Companies’ vast Hudson Yards project, which 12 million square feet of development available including up to 800,000 square feet of retail.
While Clark expected the first of as many as three towers on the Brookfield site to be completed and filled with tenants by 2015, he did not believe there would be much retail.
“At the moment our thinking is not to go with any major retail center,” he said, with shopping being more “incidental.” He added about the retail portion of the development: “It could be 50,000 to 100,000 square feet, maybe, but far less than a mall. We will leave those desires to those on the Hudson Yards.”