A wave of new development is poised to transform and enlarge the top end of Manhattan’s office market, even as many older and underperforming buildings undergo conversion to apartments.
The new projects are in various stages of development. Some are already in early stages of construction, others with signed anchor tenants are poised to go vertical, and yet others are awaiting the magic cocktails of anchor tenants and financing to proceed.
JLL’s New York chairman and president Peter Riguardi, a prolific dealmaker in his own right, put the picture together for Realty Check.
Thanks to supply-and-demand cohesion, at least four projects are sure things in the wake of JPMorgan Chase’s construction of its new headquarters skyscraper.
“There’s the Citadel tower nearby,” Riguardi said — the Vornado-Rudin-en Griffin project known as 350 Park Ave. to break ground early next year. Two of Griffin’s Citadel companies will be anchor tenants.
“Related is going to build 70 Hudson Yards for Deloitte,” he said — a lease negotiated by JLL. And BXP, formerly known as Boston Properties, is teeing up 343 Madison Ave., where it has a tentative deal with CV Starr to be the anchor tenant.
Extel, meanwhile, has started work on 570 Fifth Ave., another jumbo where Ikea will have its flagship store and where Extell chief Gary Barnett is close to a deal with law firm Simpson Thacher & Bartlett anchor the project’s 1 million square-foot office portion.
Things get a little less certain after those, Riguardi said. “There are number of properties with lots of discussions going on but not underway yet,” he said.
Most prominent among them is 175 Park Ave., for which Riguardi is the leasing agent. The cloudbuster on East 42nd Street to be developed by RXR and TF Cornerstone would consume the Grand Hyatt Hotel and rise to nearly 1,600 feet. Tweaks are still being made to the design by architectural firm SOM.
Also in play are a potential Vornado supertall on the now vacant site of the former Pennsylvania Hotel, where JLL is also the leasing agent, and a smaller, unspecified SL Green project at the former Brooks Brothers store location at 346 Madison Ave.
Beyond those are major sites with giant question marks over them.
Larry Silverstein and American Express are negotiating, under a veil of extreme secrecy, a possible deal for a new tower at Two World Trade Center.
Even more mysterious is the fate of the former Roosevelt Hotel, where owner Pakistan International Airlines is evaluating options.
Office demand is so strong, “Everyone’s trying to figure out a way to find a development site,” Riguardi said.
All the projects, whether in construction or proposed, will require leases “in excess of $200 per square foot,” Riguardi said — “due to land costs, hard and soft development costs, high interest rates and the builders’ desired yields,” he said.
Lever House has hit 100% occupancy, owners Brookfield Properties and Waterman Interests announced. The leasing milestone coincides with completion of a $100 million renovation and restoration of the Midcentury masterpiece.
The iconic, boutique-scale property at 390 Park Ave. had a troubled history after Lever parent Unilever moved to Connecticut in 1997 and before Brookfield and Waterman acquired it near-empty in May 2020.
After the new landlords conducted extensive improvements under the watchful eye of the Landmarks Preservation Commission, the building — flooded with light due to the small tower’s narrow form on the avenue — is now home to hedge funds, private equity firms and what the landlords call “distinguished family offices.”
Expansions are nibbling away at what remaining available space there is at SL Green’s 245 Park Ave.
In the latest deal, longtime financial tenant EQT Partners added 38,358 square feet in an expansion lease, bringing the firm’s total commitment to 114,562 square feet — and the building’s occupancy to 95.7%.
The asking rent was $190 per square foot. It was swift growth for EQT, which became a tenant only in December 2024.
The 1.8 million square-foot tower is undergoing what SL Green leasing head Steven Durels called a “transformative redevelopment” that includes a new plaza, storefronts and lobby overseen by KPF Architects. There are also a large new wellness center and a terra cotta overclad of the facade.
SL Green took control of 245 Park, which is now about 90% leased, in 2022.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
