SL Green asking record $322 psf at One Vanderbilt

Even as Manhattan office sector struggles, firm seeks top dollar

New York /
Jul.July 21, 2021 05:26 PM
SL Green CEO Marc Holliday and One Vanderbilt (Getty)

SL Green CEO Marc Holliday and One Vanderbilt (Getty)

Top-floor tenants of SL Green’s One Vanderbilt would enjoy unbeatable views. But for that luxury, the landlord is seeking an unprecedented price.

SL Green is asking $322 per square foot for the top floor of its supertall office tower, and $312 for the penultimate level, according to documents obtained by The Real Deal. The asking rents make its so-called “sky floors” the priciest office space in the city.

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If anyone bites, that would smash the record of $300 per square foot reportedly paid by Ken Griffin’s Citadel at 425 Park Avenue in 2019.

 

“This would certainly be a new benchmark if they can succeed at leasing this north of $300 a square foot,” said Cynthia Wasserberger of JLL.

The owner of the tallest office tower in Midtown, at 1,401 feet, is making no apologies.

“These floors are priced to reflect the uniqueness of the offering: truly one-of-a-kind spaces at New York’s best address,” said Steve Durels, executive vice president at SL Green.

As work-from-home slowly gives way to hybrid work models, commercial landlords near Grand Central Terminal have struggled. Nearly 23 percent of commercial spaces near the transit hub sit vacant, the second-highest rate in Manhattan, according to a recent Cushman & Wakefield report.

Some signs, notably an uptick in tours and decreased sublet volume, point to a brighter future. But as of last month, only about a fifth of office workers were back at their desks, and many companies remain uncertain about when, if at all, they will return to the pre-pandemic norm.

Annual rent of $322 per square foot may be a high bar compared to the neighborhood’s Class A average of $72.54, but One Vanderbilt has several factors in its favor.

First, it is brand new and state-of-the-art, whereas most of Midtown East’s office buildings are dated, thanks to restrictive zoning that was not changed until five years ago. And it is substantially taller than its local peers, thanks to the rezoning, allowing for premium rents on the upper floors.

Its location immediately next to Grand Central terminal makes it easy for commuters, especially those taking Metro-North from ritzy suburbs north of the city. “For employers who want convenience for their employees, this is as good as it gets,” said Wasserberger.

Further, the pandemic has pushed tenants toward new construction offering column-free floor plates and modern ventilation for virus-weary workers.

This spring, One Vanderbilt anchor tenant TD Bank expanded its footprint there by 24,000 square feet. The 1,400-foot tower is now 89 percent leased, according to SL Green.

Now, all that’s left for SL Green executives is finding a taker. “They will probably be courting a tenant that is relatively price-insensitive,” said Wasserberger, “and just wants something relatively unique.”





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