Sometimes it seems that the urban experience in New York is not the physical manifestation of grand ideas, but the battles that preceded, and often defeated, them. Westway. Any number of Robert Moses’ highway projects. Hopefully the Jets stadium. It is an oft repeated canard that the intransigence of New Yorkers, usually couched in some vaguely negative socialist language, stops us from becoming even grander.
What is overlooked is that they aren’t striving for, say, London or Paris, since great, to many of them, implies something more like Houston (which has no zoning laws whatsoever) or Tysons Corner (which has no soul whatsoever). Basically, those who gripe most about our lack of vision is usually someone telling us to look up in the sky when they are reaching in our pockets.
But rarely do we sing praises to what such a difficult environment has protected us from, since, like water on a rock, eventually every part of the city succumbs. It’s not that an officious office tower usurps a museum, just that one bad idea gets done a little later than the developer hoped. There aren’t many stable models to measure the impact of development and jobs, but those that exist do point to the some correlation between expanding available space in advance of job creation. One problem with the models is that the lifespan of a building exceeds the cycles observed, so the buildings need to have some value beyond one economic cycle, as an adaptable office locale, or for other uses. But the bland requirements and scale of commercial office development is boxing us into an ugly corner (no pun intended). The fortuitous appeal of converting manufacturing facilities of the 19th century into the most expensive residential real estate in the world cannot be applied to blindly to outmoded office blocks. Or, if it is inevitable, perhaps we should exert more control when the necessity for new office space arises.
If this sounds like another screed against the plans for the WTC site, it is. Last week, Crain’s did one of their commercial real estate round ups (I hesitate to say yearly or quarterly, because sometime it seems weekly over there), detailing two significant trends: the clear superiority of the Times Square/42nd corridor as
hottest rental market for financial services firms, and the reappearance of flat out spec office space for the first time in over a decade.
I’m not going to quote numbers and get all breathless about the details, which might excite anyone who thinks rent increases somehow benefit their immediate financial prospects or get all hott for bland, column-free contract interiors with lots of high-speed wiring, since neither does anything for me.
What I am going to point out, however, is that the midtown district is doing so well that firms are climbing over each other to take space that is drifting towards $100/sf in places like 1 Bryant Park (new BOA building — let’s hope it’s not as red as their branches), and prompting two spec buildings (one at the NE corner of Fifth and 42nd, and, technically, the new Times Tower, the non-Times portion of which — some 850,000sf — is still unrented). The other two major spec projects going on are 7WTC and the so-called Freedom Tower, together which are bringing over 3 million square feet of space on-line.
7WTC recently topped out, and it still lacks tenants — any. There were noises about the SEC — which ended up across the street in one of the WFC buildings — a while back, and now Silverstein’s people are trotting out some law firm. The key point is that, with the government programs and other incentives, the final going rate for space there may be likely less than half of what is being asked as some locations midtown. To put real numbers on it, that means a new tower in midtown commands a $200,000,000 premium over 7WTC (500,000sf over ten years).
One reason Silverstein isn’t holding a fire sale is that, unlike the other spec sites, 7WTC is paid for. So props to him for holding out for a good deal in a good market. Except he might be reaching for a deal that isn’t there, nor ever will be. The Hudson Yards proposal, which isn’t showing any signs of slowing, may bring the equivalent of 20 7WTC’s over the next two decades. And there is no evidence that downtown will ever be the commanding commercial zone it once was (a fact that was becoming evident before the attacks). Kevin Rampe gets apoplectic anytime someone questions his plan for 10 million square feet of spec space, even as no one, including him, can tell us who actually wants it. We deride the French for their putative profligacy when it comes to public building, but it looks like our memorial to the WTC attacks might be five empty office towers. That is perverse and sad, and demands a reconsideration of the site development. Something easy to do, since most of it still hasn’t begun construction. But instead we press ahead as if it were all engraved in the same granite as the cornerstone of the Freedom Tower — which itself hasn’t finished design.
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If you stand very still, you can hear the crickets.
Sometimes it seems that the urban experience in New York is not the physical manifestation of grand ideas, but the battles that preceded, and often defeated, them. Westway. Any number of Robert Moses’ highway projects. Hopefully the Jets stadium. It is an oft repeated canard that the intransigence of New Yorkers, usually couched in some vaguely negative socialist language, stops us from becoming even grander.
What is overlooked is that they aren’t striving for, say, London or Paris, since great, to many of them, implies something more like Houston (which has no zoning laws whatsoever) or Tysons Corner (which has no soul whatsoever). Basically, those who gripe most about our lack of vision is usually someone telling us to look up in the sky when they are reaching in our pockets. But rarely do we sing praises to what such a difficult environment has protected us from, since, like water on a rock, eventually every part of the city succumbs. It’s not that an officious office tower usurps a museum, just that one bad idea gets done a little later than the developer hoped. There aren’t many stable models to measure the impact of development and jobs, but those that exist do point to the some correlation between expanding available space in advance of job creation. One problem with the models is that the lifespan of a building exceeds the cycles observed, so the buildings need to have some value beyond one economic cycle, as an adaptable office locale, or for other uses. But the bland requirements and scale of commercial office development is boxing us into an ugly corner (no pun intended). The fortuitous appeal of converting manufacturing facilities of the 19th century into the most expensive residential real estate in the world cannot be applied to blindly to outmoded office blocks. Or, if it is inevitable, perhaps we should exert more control when the necessity for new office space arises. If this sounds like another screed against the plans for the WTC site, it is. Last week, Crain’s did one of their commercial real estate round ups (I hesitate to say yearly or quarterly, because sometime it seems weekly over there), detailing two significant trends: the clear superiority of the Times Square/42nd corridor as hottest rental market for financial services firms, and the reappearance of flat out spec office space for the first time in over a decade. I’m not going to quote numbers and get all breathless about the details, which might excite anyone who thinks rent increases somehow benefit their immediate financial prospects or get all hott for bland, column-free contract interiors with lots of high-speed wiring, since neither does anything for me. What I am going to point out, however, is that the midtown district is doing so well that firms are climbing over each other to take space that is drifting towards $100/sf in places like 1 Bryant Park (new BOA building — let’s hope it’s not as red as their branches), and prompting two spec buildings (one at the NE corner of Fifth and 42nd, and, technically, the new Times Tower, the non-Times portion of which — some 850,000sf — is still unrented). The other two major spec projects going on are 7WTC and the so-called Freedom Tower, together which are bringing over 3 million square feet of space on-line. 7WTC recently topped out, and it still lacks tenants — any. There were noises about the SEC — which ended up across the street in one of the WFC buildings — a while back, and now Silverstein’s people are trotting out some law firm. The key point is that, with the government programs and other incentives, the final going rate for space there may be likely less than half of what is being asked as some locations midtown. To put real numbers on it, that means a new tower in midtown commands a $200,000,000 premium over 7WTC (500,000sf over ten years). One reason Silverstein isn’t holding a fire sale is that, unlike the other spec sites, 7WTC is paid for. So props to him for holding out for a good deal in a good market. Except he might be reaching for a deal that isn’t there, nor ever will be. The Hudson Yards proposal, which isn’t showing any signs of slowing, may bring the equivalent of 20 7WTC’s over the next two decades. And there is no evidence that downtown will ever be the commanding commercial zone it once was (a fact that was becoming evident before the attacks). Kevin Rampe gets apoplectic anytime someone questions his plan for 10 million square feet of spec space, even as no one, including him, can tell us who actually wants it. We deride the French for their putative profligacy when it comes to public building, but it looks like our memorial to the WTC attacks might be five empty office towers. That is perverse and sad, and demands a reconsideration of the site development. Something easy to do, since most of it still hasn’t begun construction. But instead we press ahead as if it were all engraved in the same granite as the cornerstone of the Freedom Tower — which itself hasn’t finished design.