In early February, we noted an interview that SJP Properties’ Stephen Pozycki gave to Real Estate Weekly about progress at LEED Gold hopeful 11 Times Square, which is currently under construction at the corner of 42nd Street and 8th Avenue. “Tenants will come,” Pozycki said at the time, while also expressing his expectation that the tower would be half-leased come summer. Despite the softening market, it appears that Mr. Pozycki’s prediction may prove prescient, as Real Estate Weekly reported this week that the French bank Natixis is considering up to 250,000 square feet at 11 Times Square.
The bank is apparently conducting test fit-outs but has yet to commit to occupying space at the tower. Natixis currently leases space in a number of Midtown trophy buildings- including 9 West 57th Street and 1350 Avenue of the Americas- that it wants to consolidate into one similarly prestigious space- LEED Gold, even on 8th Avenue, appears to meet that litmus test. Interestingly, REW also notes that asking rent isn’t the issue for Natixis (despite its $1.4 billion exposure to the U.S. subprime mortgage mess- the largest of any French bank) and whether it signs the deal will depend on whether it can lay its offices out as desired given the property’s floor plates.
As you’ll recall, 11 Times Square is a speculative building (i.e., construction is proceeding without SJP having an anchor tenant in place). Nevertheless, Mr. Pozycki has been adamant that construction will continue move forward as planned, confident that the tower’s architecture, address, and sustainable features will attract 1 million square feet’s worth of tenants. Sill, commercial office leasing in Manhattan during the first quarter of 2008 has unquestionably slowed, as firms assess how economic conditions might impact their operations. As REW also reports, many firms are delaying decisions and staying put until the market dust settles.
Nevertheless, a 250,000-square-foot lease at what will likely be more than $100 per square foot would be great news for SJP, and virtually guarantee that an important green project won’t meet the same fate as the Beer Belly Building. REW expects that Natixis should make its decision by early summer; 11 Times Square is scheduled to open sometime during the summer of 2009.
- 11 Times Square Moving Forward (gbNYC)
- 11 Times Square and the Subprime Lending Meltdown (gbNYC)
- Bear Stearns Meltdown May Drown Beer Belly Building (gbNYC)