Times Up: Once a Burgeoning Green Neighborhood, the Times Square Submarket is Struggling

As part of gbNYC's rolling transformation from one platform to another -- WordPress to Drupal, for all you curious nerdz -- we've been having to do a lot of re-tagging of old posts. The reasons for this are both complicated and uninteresting, but it's working: our Google rating is back, for one thing, and things are starting to make sense more generally. There has been an unexpectedly poignant side benefit to all this re-tagging, though, as your author (and super-intern Vik Gupta) have worked our way back to 2007-vintage posts about burgeoning new green developments that were supposedly thisclose to becoming the next big green thing. Vornado's LEED-CS Gold building a 20 Times Square is locking up an anchor tenant! Except... no, it's not, and construction has been halted. CBRE is confident that its LEED Gold 11 Times Square tower is going to do fine, even with an anticipated dip in the market! Except... it isn't. Crain's reports today that 11 Times Square doesn't have a single tenant for the 1.1 million square feet of green office space due to open in early 2010. The Times Square Building -- former home of the New York Times -- is currently without a tenant for any of its 767,000 square feet of space. What is happening to the Times Square Submarket?

The short answer seems to be, "the same thing that happened to the rest of the commercial real estate market." But in the Crain's piece, Andrew Marks points to some problems that are specific to the Times Square market. "Many brokers are forecasting that Times Square's rebound will lag that for the rest of midtown because of a variety of factors," Marks writes:

'The floor plates for most of the Times Square buildings are configured for big tenants,' notes [Marissa Manley, president of Commercial Tenant Real Estate Representation Ltd]. 'If you're a hedge fund or a startup law firm and you need 10,000 square feet, those buildings don't offer as much.'

Tenant broker David Goldstein, executive vice president and director at Studley, cites another competitive disadvantage. 'The area's biggest envelopes are raw space, where major build-outs are required,' he says. 'That's a tough sell these days, with so much prebuilt space on the market at [relatively] low prices.'

Stephen will be back tomorrow with more thoughts on this, but speaking for myself -- someone who is still learning about this stuff on the job (another advantage of the re-tagging, there) -- I'd love to hear your thoughts on how and why this is happening, and what could be done to stop the bleeding. Empty buildings are obviously a fact of city life during downturns, but it's doubly disappointing to see some truly interesting LEED-certified office buildings -- both the nearly-done 11 Times Square and still-notional 20 Times Square -- falling victim to the vicious vicissitudes of the market.