MIDTOWN JEWEL: Here’s a new rendering of the luxe Baccarat Hotel planned for 20W. 53rd St. (
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The General Services Administration has vowed to sign a long-delayed lease at 1 World Trade Center by the summer, Sen. Chuck Schumer told us last night.
“I spoke to [GSA acting administrator] Daniel Tangherlini and he said, ‘We’ll get it done by summer,’ ” Schumer said.
Schumer added, “We called Douglas Durst [the Port Authority’s 1 WTC partner], and he said he needs it by around July 4.
“So we’re going to push the GSA to do that,” Schumer said.
The pending, 300,000 square-foot lease is significant not only for its size, but because it’d push the 3 million square-foot tower over the psychologically crucial 50 percent-leased mark.
PA executive director Patrick Foye, who’s been hyping the tower’s milestone in rising taller than the Empire State Building, has said that 55 percent of the skyscraper is “expected” to be leased — which is not the same as actually leased.
We reported last week that Schumer, a staunch proponent of new office development, was prodding the GSA to complete the 1 WTC deal in light of the agency’s paralysis over the recent spending scandal.
He said, “It’s very important to private-sector tenants to know that 1 World Trade is more than 50 percent leased — not only companies interested in that building, but also in 4 World Trade Center,” which so far has inked only the PA and possibly a city agency as tenants.
Condé Nast signed for 1 million square feet and Beijing Vantone for 200,000 square feet at 1 WTC.
The GSA signed a term sheet with the PA and Durst last summer. The lease — originally meant to be twice as large — has been in negotiation for five years.
The PA and Durst declined comment. Reps for the GSA could not immediately be reached.
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There’s a chilly side to the two giant leases signed in the past few weeks that have heartened landlords and brokers: Both of the re-upping tenants are staying in the same buildings where they are now — Morgan Stanley at One New York Plaza and Viacom at 1515 Broadway.
What’s still missing from the market are big-ticket relocations craved by the new towers hungry for tenants — both 1 and 4 World Trade Center, 11 Times Square, 250 W. 55th St. and 55 W. 46th St., the office portion of Extell’s International Gem Tower.
Even when a company takes the same amount of space at a different address, the move itself signifies market momentum. It can stabilize and validate an entire new project, as law firm Proskauer’s move to SJP Properties’ 11 Times Square did a few years ago — even though no other large tenant has yet signed on there.
No one expected Morgan Stanley to move. But Viacom — which renewed on 1.4 million square feet and added 200,000 feet at the SL Green property in Times Square — had its pick of new product whose owners were aggressively courting them.
The suitors also included the World Financial Center, where several large lease expirations are coming up.
Cushman & Wakefield’s Andrew Sachs said the market for major relocations “is very sluggish. The transaction time has become very stretched out.”
Sachs noted, “During uncertain economic times, many companies will elect to renew. They’ll stay in the same envelope of space and avoid the big expenditure of moving.”
Meantime, landlords are buoyed by tons of same-location renewals, which speak to the health of existing inventory.
In one typical deal, Sachs and Cushman colleagues Ben Shapiro and Thomas Citron just negotiated a 20,000 square-foot renewal for law firm Davidoff Malito & Hutcher at the Fisher Brothers’ 605 Third Ave., although its lease ran through 2014. Jack Whelan acted for the landlord in-house.
Reflecting a high degree of cooperation between landlord and tenant, Davidoff Malito will temporarily use space on the 25th floor while it redesigns its longtime 34th-floor digs — “which they had to do to retain and recruit talent,” Sachs said. “They were in the building for over 20 years, and the space was a little tired.”
Asking rents in the tower’s higher floors are $65-70 a square foot.
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Whew — we’re glad to learn that the Baccarat Hotel project at 20 W. 53rd St. is on track exactly as we called it in our columns of March 6 and April 17.
But we wondered when Starwood Capital CEO Barry Sternlicht, who’s also chairman of Baccarat, last week made it sound as if the $400 million, 45-story hotel/condo tower was still in the dreaming stage.
The Wall Street Journal reported Sternlicht “will be shopping for a construction loan at a time when lending has been scarce for new hotel projects. The company hasn’t scheduled a groundbreaking.”
That sounded awfully tentative. So just to be sure we hadn’t imagined it, we strolled over to the site. Tishman Construction’s earthmovers were noisily banging away at a crater 40 feet below sidewalk level.
As anyone within earshot knows, ground was broken months ago at the former and future New York Public Library Donnell site. What’s Sternlicht being coy about?
And what happened to the project’s real developer, Tribeca Associates? Its name didn’t appear in the Journal article. Had something happened since the last time we saw Tribeca’s name emblazoned on the plywood fence?
Nope — the company confirmed it’s “proud to serve as the developer” and as Starwood Capital’s partner. We were relieved to hear that, too. s