The Blackstone Group is mulling options for a new headquarters in New York City as large as 1 million square feet, sources told The Real Deal. The investment giant’s current leases in the Plaza District expire in several years.
Blackstone, headed by CEO Stephen Schwarzman and president Jon Gray, has asked a handful landlords to submit proposals for a new headquarters in Midtown and the Far West Side.
Among the sites under consideration is a supertall office tower on Park Avenue proposed by Vornado Realty Trust and Rudin Management. The two have floated the idea of developing properties they separately own into a 1,450-foot-tall tower at 350 Park Avenue that would have 1.68 million square feet of space.
The project is particularly attractive to Blackstone, sources said, because the site sits catty-corner to the investment firm’s current headquarters at 345 Park Avenue. Between that location and another office at 601 Lexington Avenue, Blackstone occupies about 800,000 square feet on leases that expire in 2027.
Blackstone is looking at options to combine its offices and expand its footprint. The search is in its very early stages, and sources familiar with the process said Blackstone could also choose to renew and grow at 345 Park Avenue if space becomes available.
A spokesperson for Blackstone declined to comment.
Other sites under consideration include three developments in the Hudson Yards area: Tishman Speyer’s Spiral, Related Companies’ 50 Hudson Yards and 3 Hudson Yards, which is being co-developed by Boston Properties and the Moinian Group.
On its second-quarter earnings call Wednesday, Boston Properties said it had recently made a pitch to a large tenant.
“Earlier this month we made a proposal and did a virtual presentation to a million-square-foot user with a mid-2020s delivery timeframe for 3 Hudson Boulevard,” said company president Doug Linde, without revealing the name of the tenant.
The REIT executive noted that most tenants are holding off from making moves on office space unless a lease expiring in the near future forces their hand to make a decision, though he said there are a few exceptions.
“Some long-range planning activities continue despite the current economic and health uncertainties.”
Blackstone’s interest in a new Manhattan headquarters could be considered a vote of confidence for the city’s office market, which is suffering through an identity crisis as the shift to work from home during the coronavirus pandemic has many wondering if companies will abandon their central business district offices.
Gray earlier this month said people will eventually return to their office buildings, but “there will be less density, there will certainly be a lot less new construction.”
Contact Rich Bockmann at [email protected] or 908-415-5229.