Real estate bragging rights reach new heights

SL Green chief Marc Holliday raves about One Vanderbilt’s new observation deck

New York /
Jan.January 28, 2022 04:41 PM

Marc Holliday, chairman and CEO, SL Green Realty Corp. (SL Green Realty Corp.)

Owning a tower that literally scrapes the sky used to be enough to impress your golf buddies. Not anymore.

To paraphrase Sean Parker (via Justin Timberlake), a skyscraper isn’t cool. You know what’s cool? A skyscraper with an observatory.

Marc Holliday took the opportunity this week to bask in the early success of The Summit, the Instagram-ready observation deck 1,300 feet in the air at the top of One Vanderbilt, SL Green’s trophy Midtown office tower.

“As successful as it will be financially, it is an important addition to New York and the destination entertainment sector,” the SL Green CEO said on the company’s fourth-quarter earnings call Thursday.

Holliday gushed about the observation deck’s reception from visitors who posed for pictures with its transparent floor and spent up to two hours taking in the sights.

“It’s something people are coming back to again and again, which is very atypical for this market to have people coming back 2, 3, 4 times in a very limited period,” he said.

The Summit, which opened in October, does indeed add to an increasingly competitive business that’s still trying to find its footing after the pandemic frustrated the Big Apple’s tourism industry.

Over at Hudson Yards, Related Companies in 2020 opened its Edge observation deck, which is now majority owned by KKR. The new breed of tourist attraction competes with older sightseeing platforms at the Empire State Building and Rockefeller Center. One World Trade Center opened its observatory in 2014.

Holliday didn’t disclose attendance figures for The Summit’s initial months of operations, but SL Green projects that the attraction will receive up to 1.5 million visitors this year, or 70 to 75 percent of its roughly 2 million capacity.

The observation deck is expected to account for 20 to 25 percent of the $100 million of income that the firm predicts One Vanderbilt will generate annually.

This is undoubtedly bad news for the Empire State Building, which long dominated the view-from-the-top-of-a-tall-building business but has seen its grip loosen with each new competitor.

Empire State Realty Trust saw visitors to that landmark fall from 4.3 million in 2013 to 3.5 million in 2019. The situation is particularly troubling for the REIT, which, prior to the pandemic, drew a large percentage of its income from the attraction.

SL Green’s Holliday said The Summit is still only operating at partial capacity, five days a week with reduced hours. He said the company plans to add an extra day and extend its hours of operation sometime around the spring.





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