BXP’s 250 West 55th Street: Wall Street Crisis May Yet Deliver Blow to Green Building

Its deal with a major law firm is on the rocks, and it could spell trouble for Boston Properties’ speculative office project near Columbus Circle.

According to Real Estate Weekly (via the Wall Street Journal), Boston Properties’ deal with law firm Proskauer Rose for 500,000 square feet of its LEED Gold hopeful 250 West 55th Street project may be on the rocks. (Just as a side note, I can see the site from my office and excavation and foundation work is moving forward as we speak at full steam). The speculative, SOM-designed green commercial office project had no trouble lining up tenants for close to 80 percent of its 1 million square feet, even while SJP Properties’ similarly speculative and LEED Gold 11 Times Square just a few blocks south was (and continues to be) on the hunt for its first tenant of any size.

Should Proskauer pull out of the deal, it would be the credit crunch’s biggest blow to a green building in New York City to date. According to REW, prior to its share price plummeting, Morgan Stanley had offered incentives to Proskauer to vacate its current space at 1585 Broadway early so that the (at the time) investment bank could take over all of the space in the tower. With asking rents at 250 West 55th Street in the low $100s per square foot, given the glut of available subleases now on the market in high-profile, Class A spaces, and the continued bad news from the legal sector, it’s difficult to imagine that Proskauer would, or even could, go through with the transaction absent those subsidies from Morgan Stanley.

In any event, it’s clear that the impact of the Wall Street crisis on green building here in New York City is still rippling through the marketplace, and I can’t imagine that it will be anytime before the middle of 2009 before we can draw any real conclusions about its ultimate impact.

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