Iron workers began assembling a steel frame in Times Square today for the largest speculative development under construction in Midtown Manhattan.
SJP Properties is building the 40-story, 1.1 million-square-foot commercial and residential tower at 11 Times Square. The $1.2 billion project is expected to be completed by January 2010.
John Cicero, a principal at commercial real estate appraisal firm Miller Cicero, said it seemed daring to build new office space on-spec as the economy weakens and worry spreads on Wall Street.
“In a market where there is talk about significant job losses in the financial sector, which will ripple through the economy, I think putting up a building without any major tenant would be risky,” he said.
The steel frame’s construction is a milestone, Cicero said.
“Certainly once you’ve got your skeleton up there is no turning back,” he said.
He estimated that a building that size would hold about 5,000 employees, but he did not anticipate them coming from new job creation.
“I am sure they would just be relocating from other areas,” he said, adding that over the past few years very few big office buildings had been built in the city.
SJP Properties chairman and CEO Steven Pozycki made a similar point, telling The Real Deal for this month’s issue that aging buildings would drive demand for Class A offices.
“When we got going on this about two years ago, the office market was tightening up substantially … (but) it is still probably the tightest it’s been in at least my 25 years of observing it,” he said.
The building, located at 42nd Street and Eighth Avenue, will seek Leadership in Energy and Environmental Design (LEED) certification from the U.S. Building Council’s rating system for green buildings.
SJP Properties is also developing two luxury condominium projects nearby, a 21-story high-rise at 45 Park Ave. in Murray Hill and a 42-story tower at 46th Street and Eighth Avenue.
The company broke ground on 11 Times Square in June 2007.