Valentine’s Day week came up all hearts at 11 Times Square. As we reported exclusively on nypost.com yesterday, SJP Properties’ risk-taking, 40-story tower is on the brink of signing a third major office tenant — digital market data provider eMarketer, which is expected to finalize a deal this week for 53,573 square feet.
That will push the tower’s 1 million square feet of office space to comfortably over 70 percent leased. Law firm Proskauer Rose took 406,000 square feet in 2010, and Microsoft signed for 205,000 square feet last month.
Meanwhile, Steven J. Pozycki’s development company also filled all of 11 Times Square’s remaining available retail component with three just-completed leases.
In the largest, first uncovered by my colleague Jennifer Gould Keil, Mexican-themed, “party scene” eatery/entertainment venue Senor Frog’s has signed for 21,000 square feet, most of it in the windowless basement but with a 2,400-square-foot street “footprint” on the 42nd Street side.
It will be the first northeast branch of Senor Frog’s, which has locations in the Caribbean, Las Vegas and Orlando.
In addition, Off the Wall Yogurt claimed 2,500 square feet and Bank of America, 2,393 square feet for a retail branch, our sources said. Last year, International Global Foods took 24,000 square feet for a casual restaurant/gourmet store, which is now under construction.
Executives and reps for SJP would not comment.
But sources said eMarketer, now at 75 Broad St., will have all of floors 12 and 14 (there’s no 13) at 11 Times Square, where Proskauer is on 17-30 and Microsoft is coming to 4-9. Most of the remaining available office space is on floors 31-40.
The new leases are further vindication for Pozycki, who bought the former parking lot site with a unit of Prudential Financial for $306 million in 2006 and then spent a reported $950 million to construct the LEED Gold-certified, technologically advanced skyscraper just north of the New York Times Co. headquarters.
The project broke ground in 2007 without any pre-signed tenants. The financial market crash made leasing more difficult and threw water on expectations of $100-plus per square foot leases.
The temporary delay in finding tenants led to much under-informed media commentary claiming that “spec” construction rarely succeeds.
In 2009, The Real Deal asked, “Can 11 Times Square Hang on?” — one of many stories speculating that SJP might lose the project to Prudential or to its banks. That was a year before the building even opened.
But short-term delays in leasing up a large new spec tower are entirely common in New York — similar groaning was heard about Larry Silverstein’s 7 World Trade Center, which filled after a slow start.
Over-reaching sometimes can cost a developer its project — as happened to Solomon Equities and Ian Bruce Eichner in the early 1990s. But their losses were the city’s gain, as their excellent but vacant Midtown projects soon sold or leased up at discounts and helped usher in the rebirth of Times Square.
The year or few years when a new office project might want for tenants must be measured against its likely 100-plus year life span. And overdramatizing short-term vacancy seems petty in light of Manhattan’s urgent need for state-of-the-art office product.
There’s no denying the pause put Pozycki and partners under strain. Last summer, Prudential Real Estate Investors CEO J. Allen Smith told The Times that had they known how long leasing at 11 Times Square would take, “We probably wouldn’t have done it.”
But then, we wouldn’t have a sophisticated new home for world-class firms and an array of brightly lit retail uses at a crucial corner of the 42nd Street “Deuce,” which was one of Manhattan’s seediest and most dangerous sites as recently as a dozen years ago.
It wasn’t clear how much 11 Times Square’s new tenants are paying. One source said the asking rent for the retail deals was “$150-$500 depending on where in the building it is,” while the ask on the eMarketer floors was “commensurate with the market, in the high $60s to low $70s” — although the remaining upper floor with great views is priced considerably more.
CBRE’s Roger Griswold, Tim Dempsey and Greg Maurer-Hollaender repped eMarketer, while Jones Lang LaSalle’s Mitchell Konsker, Paul Glickman and Diana Bisotti repped the ownership.
Senor Frog’s was repped by SCG Retail’s Bruce Shepard and Jordan Cohn; RKF’s Robert K. Futterman and Joshua Strauss repped the landlord.