As the home of the paper that gave the world all the news that’s fit to print shifts just west of Times Square, the future of the iconic New York Times building at 229 West 43rd Street remains uncertain, though speculation is building among commercial brokers.
When the building is converted to retail and office space, the tenants that fit there next will occupy some of the world’s premier real estate, but its future must first be approved by the city’s Landmarks Preservation Commission. Tishman Speyer, which led the investment partnership that bought the Times headquarters for $175 million in 2004, submitted renovation plans to the commission last month.
While the newspaper will remain in the 750,000-square-foot building until its new Eighth Avenue location is completed in 2007, market watchers have already spent considerable time pondering what’s next.
A transition from big stories to a big-box store is one possible outcome, with Target mentioned as a possible Midtown shopping mecca.
Brokers say the building, which was built in 1913 and is already becoming known as the “old Times building,” will represent a huge amount of space coming into a very tight retail and office market in three years.
On the retail side, C. Bradley Mendelson, an executive director at Cushman & Wakefield, said Tishman Speyer could get more than 100,000 square feet of space of retail on the ground and lower levels, potentially opening the way for a destination user to pull shoppers from the heart of Times Square onto the side street location.
“If that space were on the avenue, it would be worth a bloody fortune,” Mendelson said.
The Times building is beautiful, but 43rd Street can be “rather dreary,” he said. Plans submitted by architecture firm Gabellini Sheppard Associates to the landmarks commission last month involve converting truck bays on the 43rd Street side of the building, where newspapers were once loaded onto trucks for distribution — the only portion of the building that is landmarked — into glass-fronted retail space.
But Gregory Tosko, executive vice president at CB Richard Ellis, who represented the Times in marketing the property to potential buyers, said the retail would likely face the 44th Street side of the building and Shubert Alley, which is more attractive and well-traveled than 43rd Street.
“I don’t think 43rd Street will likely be the main driver for retail,” he said, adding that 44th Street is not the “typical side street” because of its foot traffic.
Jeffrey Roseman, an executive vice president and principal at Newmark Knight Frank, said the Times building could be considered akin to the smallest house in the best neighborhood. “Those still sell,” he said. And same goes for retail space in the building, despite its side-street location. “I think Times Square being so hot, it will rent.”
Roseman said a big-box store seems more likely than carving up 30 smaller stores in the retail section. Mendelson mentioned that Target, for example, could pull people from Broadway and afford the rents.
Tosko agreed that big-box could work for the site, something the Times had considered and rejected after its printing presses were moved from the building’s lower levels. The retail space, however, could also be used for theme restaurants that are eager to get into Times Square, he said.
Brokers said it’s hard to estimate potential rents, but side street retail spaces are leasing currently for between $75 and $200 a foot, compared to up to $600 to $700 in Times Square’s “bow tie.”
According to a fall 2005 report from the Real Estate Board of New York, retail rents on Broadway between 42nd and 47th streets average $432 a square foot. Rents range anywhere from $200 to $800 a square foot, jibing with figures provided by brokers.
The building’s office space, the larger chunk of the building, will likely enter a tight market. Brokers said the building has unusually large floor plates for a side street in Times Square, but the older design with less column spacing likely rules out trading floors. Creative companies — advertising and, obviously, publishing — would be better fits.
Tosko said the building might not be the headquarters for a financial services firm, but he said it could be secondary space. He also said the floor plates in the Times building go up to 60,000 square feet to the 11th floor and the column spacing could be changed with engineering.
Times Square’s office vacancy is very low. At the end of the 2005 fourth quarter, according to CB Richard Ellis, vacancy in the Times Square/West Side submarket was 5.8 percent.
Dirk Hrobsky, a vice president at Trammell Crow, said the neighborhood’s office market “is getting to a point where it is unhealthily tight.” He said the Times building would probably not compete directly with new or completely revamped buildings like One Bryant Park or 1095 Sixth Avenue, but there will be a market for it.
Tosko said he expects that Tishman will want to see an office rent “with a ‘6’ in front of it.” At the time of sale, Tishman’s offer might have been considered rich, but he said now rents in the area are upward of $60 to $70 per square foot or higher. “I think at the moment it is looking pretty smart,” he said of the purchase.