Trouble landing tenants slows office construction
The city’s low office vacancy rates and slowly rising rents are overshadowing a disturbing office leasing trend, according to the New York Post. Ground-up office projects have been unable to secure major tenants, which in turn has stifled development.
Yesterday’s news that Silverstein Properties might cap off 3 World Trade Center at seven stories because of its inability to land a tenant, is just the most recent example. (The Post said building beyond seven stories had always been dependent upon landing an anchor tenant.)
Nearby, at 1 WTC, there’s been little actual leasing activity beyond the Conde Nast deal, which was first conceived of in the summer of 2010. At 4 WTC, Silverstein is still searching for a private-sector tenant.
Coach inked a deal at Related Companies’ Hudson Yards, but those talks kicked off in November 2010, and Brookfield’s Manhattan West and Hines Interests’ 7 Bryant Park each have yet to begin construction thanks to an absence of tenants. SJP Properties has 600,000 vacant square feet at 11 Times Square and has not landed a new tenant since the fall of 2010, and Boston Properties’ 250 West 55th Street has just 180,000 square feet accounted for in its planned 1 million-square-foot tower. Minskoff Equities has given up, for the time being, on finding a tenant and is building a 475,000-square-foot tower at 51 Astor Place on spec. [Post]