Brookfield Properties is moving forward on its $2 billion Hudson Yards office tower without a firm commitment from an office tenant.
The developer and its partner the Qatari Investment Authority are betting that tenants will lease up most or all of the spire before 2022, when it is scheduled for completion, according to Crain’s. Brookfield has already had success filling up most of the sister tower 1 Manhattan West that is almost finished, but the company did not start building that one until the law firm Skadden Arps, Slate, Meagher & Flom had already committed to a more than 600,000-square-foot lease.
The strategy is somewhat risky, as a downturn in the economy could damage the firm’s prospects for finding tenants, and 2 Manhattan West will likely face competition thanks to nearby office towers from companies including Tishman Speyer and Related Companies. However, the firm’s financial might should help insulate it from such concerns.
Ben Brown, Brookfield’s executive vice president, told Crain’s he was not concerned that the company would have a hard time finding tenants for the building.
“We know firsthand that space in 2 Manhattan West is highly sought-after, and we’re moving ahead,” he said. [Crain’s] – Eddie Small