It’s been a tense week for Manhattan’s biggest commercial developers.
On Wednesday, Tishman Speyer won the right to build 26 acres over the state-owned Hudson Yards rail facility, without an anchor tenant and amid questions about how to lure office tenants to the far West Side. And yesterday, the owners of Madison Square Garden broke from a public-private effort to create a world-class transit hub called Moynihan Station where the Garden and Penn Station now stand, where the Related Companies and Vornado Realty Trust want to build several new office towers.
And today, the executives running those projects and another big one right between them assured a room full of brokers that they shouldn’t worry, because office tenants will follow the expansion of public transit planned for the area.
The three executives, in a pep talk to a networking association of commercial brokers called CoreNet, called the low 30s from Seventh Avenue to the Hudson River as “the future corridor for commercial development.” However long it takes to build public infrastructure or public support, the developers argue that the expanding public transit will induce demand.
Jones Lang LaSalle manager Peter Riguardi re-assured the audience by claiming that New York City would run out of office space by 2014 without new projects in Midtown and Lower Manhattan, because new developments have not kept up with growing demand.
Vishaan Chakrabarti, manager of the Related Companies-Vornado Realty Trust joint venture, remains upbeat. While the Moynihan Station plan depends on putting a commuter station on the current Garden site, where New Jersey Transit and LIRR trains are more accessible, and moving the Garden across the street. Chakrabarti, however, suggested that the venture could find a place for commuters on the Garden’s western side if the arena won’t budge. And, he said, a big-box retailer like Kmart could slide into the Ninth Avenue frontage that had been intended for a new arena.
Joshua Sirefman, who manages Brookfield Properties’ planned Manhattan West project, told the brokers that he expects two 60-story towers with a total of 2 million square feet to be built by 2013, mostly on the strength of existing transportation.
“We are in very serious discussions with a number of parties,” Sirefman said. “Interest in the West Side has only continued to grow.”
Sirefman reminded the audience that Brookfield had invested $630 million to build a platform over through-tracks, which he hopes to complete by 2010.
The last speaker Tony Mannarino, who runs the Hudson Yards project for Tishman Speyer, pegged his hopes to a 7 extension. Tishman executives describe Hudson Yards as a neighborhood rather than a pure office play, despite their plans for 8 million square feet of office space and 3.3 million square feet of residential space.
Mannarino said he was confident that when the economy’s current turmoil subsides (and the 7 line extension happens), a district with new transit access and new office space would command high prices.
“When a tenant wants 70,000 or 80,000 square feet, there are very few opportunities,” said Mannarino. “Right now we’re in a trough, but at some point things will turn around. And a lot of our space is old, so you have to create an exciting new environment. We think the West Side is it.”