IT’S been a long time since we last saw a battle between the city and New Jersey over a big corporate tenant, but a tug-of-war has broken out over Depository Trust & Clearing Corp., which has 750,000 square feet and about 2,000 employees at 55 Water St.
DTCC’s lease is not up until the end of 2012. But since it needs sophisticated electronic infrastructure, it needs to make a decision much sooner than that whether to stay downtown or to flee to Jersey, where landlords “are offering the moon,” according to our source.
The Jersey side is said to be throwing in various state incentives. Meanwhile, New York City officials are also talking to DTCC.
“We take the potential loss of any New York City employer seriously and we’re actively engaged with the Depository Trust & Clearing Corp.,” David Lombino, a spokesman for the city’s Economic Development Corp., said.
“In the long term, investing taxpayer money to keep the city a place where businesses want to be, rather than simply matching what other cities are willing to give away, will generate the greatest return for our taxpayers,” he said.
The building at 55 Water St., owned by Alabama Retirement Systems, has 3.8 million square feet, and is Manhattan’s largest office tower. It’s full except for a few, very small sublease offerings.
Four years ago, several deals were done at 55 Water at around $36 a square foot, but the ask would be higher today, sources said.
The departure of a tenant as large as Depository Trust would be a blow to downtown, where Merrill Lynch and Goldman Sachs, among others, are expected to give up large amounts of space.
DTCC provides clearing and settlement services for equities, corporate and municipal bonds, mortgage-backed securities, money-market instruments and over-the-counter derivatives.
CB Richard Ellis represents 55 Water St.’s owner and Cushman & Wakefield reps DTCC. Neither side was willing to comment.
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A few weeks ago, we noted that the Buildings Department’s online list of “stalled” city construction projects left out more than a few — among them, Tribeach Holdings’ Eighth Avenue development site on the avenue’s west side between 46th and 47th streets.
We couldn’t reach anyone for comment at the time, but we’ve since heard from Tribeach principal William Fegan, who’s also an architect. His lament over his inability to proceed with the hotel/condo project that’s left a big hole in the block might be an anthem for every frustrated developer.
Fegan said there are “lots of things going on” he understandably can’t talk about regarding his 38-story project, which was supposed to be finished by next year, according to Tribeach’s Web site.
But, “We’re still planning to go ahead. We love the location, we’re very pro-Manhattan — but we have to wait” because “everything’s in turmoil” in the credit markets.
More honest than many, he called the current lending freeze that’s left craters all over town a “horrible, nightmare scenario” that’s made it impossible to build.
Nor can Tribeach just bail out. “There’s no way I could sell it now because it would wipe out my equity,” Fegan said. Bank of Scotland holds mortgages totaling around $80 million on the site.
Fegan is anything but reassured by the recent, hard-fought sale of Worldwide Plaza two blocks north of his site for $540 million, or about $375 a square foot — a fire-sale number compared to the $1.739 billion Harry Macklowe paid for it in February 2007, but oddly welcomed by some for “establishing value.”
“If Worldwide [established value], Manhattan’s dead,” Fegan said.
The Eighth Avenue project, officially called 401 W. 46th St., would be Tribeach’s largest here so far. It previously completed successful condo projects in TriBeCa and SoHo and larger ones in Eastern Europe.
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ECT Capital, a new division of Fortis Bank Nederland, has signed a 20,626 square-foot lease at SL Green’s 100 Park Ave. The asking rent was $70 a foot.
ECT is the latest new tenant at 100 Park, which recently completed $72 million in capital improvements. Newmark Knight Frank’s John Lizzul repped the tenant; A Cushman & Wakefield team including Paul Glickman and Tara Stacom repped the owners.
The new owners of 1540 Broadway’s office portion, CBRE Investors, just signed their first new tenant at the Times Square tower: the New York Society of Security Analysts, which took 17,061 square feet and is moving from 1177 Sixth Ave. The asking rent on the 15-year term was $55.
CB Richard Ellis repped the landlord and CBRE’s John Maher repped NYSSA.