Although Brookfield Property Partners has only leased out a quarter of its proposed 2 million-square-foot skyscraper at One Manhattan West, the company is moving ahead with the construction of the roughly $2 billion tower.
The strategy emphasizes the landlord’s focus on new development rather than on buying existing buildings in the city, the Wall Street Journal reported.
Existing towers on the island are “very expensive,” Brookfield Office Properties’ chief executive officer Dennis Friedrich told the newspaper, adding that “if you have a pipeline of development and you can develop below where assets are trading, it makes the investment decision easier.”
New developments are often also more profitable. While the annual income from a purchased building in New York would be between 4 percent and 4.5 percent, according to the Journal, new developments are expected to bring in between 7 percent and 8 percent per year.
Corporate law firm Skadden, Arps, Slate, Meagher & Flom signed a 550,000-square-foot lease at 1 Manhattan West, which will be the northernmost of a couple of office towers set to rise as part of the company’s 5.4 million-square-foot, mixed-use megaproject on the Far West Side. [WSJ] — Claire Moses