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Brokers ponder plans for NY Times building - Brief Article

Leave it to New York Times to stir up controversy. Recent reports that Forest City Ratner has not pre-leased any of its space at the newspaper's proposed new headquarters at Eight Avenue and 40th Street have left some brokers dumbfounded and others reassured.

Forest City will own approximately 750,000 SF at the property, encompassing floors 27 through 52. But the developer has not given much thought to prospective tenants as of yet, and chances are it won't do so until the building is completed. "We consider the Times to be our anchor tenant," a Forest City spokesman was reported as saying.

In addition, once the leasing campaign starts, the developer hopes to get about $81 per SF at the tower, not a sum most New York City brokers find realistic.

"I think that sounds aggressive," says Byrnam Wood chairman Joseph Thanhauser, whose firm specializes in tenant representation. "I don't know if they will be able to get it and the market seems to be slowing down. It's possible they might reconsider their strategy."

Besen & Associates broker Adelaide Polsinelli had the same reaction. "$80 per SF?" she asked. "I think that's a bit too high." After a moment's consideration, however, Polsinelli changed her opinion.

"$80 per SF seems like it might be very optimistic, but I don't doubt that someone's going to commit to the space," she said. "That whole stretch at Times Square is extremely strong and extremely prominent. A company that's going to lease there is going to get a lot of exposure. If AOL wasn't going to build its own building it would gobble that space up. So maybe [Forest City] will get someone like Microsoft."

In general, not many people doubt the building's ability to attract new tenants -- it's the pricing that tends to raise eyebrows.

"Obviously when you build any new building you have to plan for the future," says Norman Sturner, general partner at Murray Hill Properties. "But I think that what Forest City is doing with a building that has 750,000 SF in the Times Square area, where so much is going on, is probably good planning. And as far as developers go, they are as good as they could get."

Sturner's rent estimations, however, fall about $20 short of Forest City Ratner's. "I expect that at the end of 2003, they are looking at upwards of $60 per SF for that space," the broker said.

Stephen J. Schofel, an executive managing director with Newmark & Company Real Estate, has more confidence in the location and the New York Times' attraction powers.

"This' will be the first newly built, available large block of space in Manhattan in a number of years," Schofel says. "With 55% of the building already pre-leased, I think itwill do very well given what the nature of supply will be at the time it is completed. Further more, I think the 'Times will act as a magnet for other tenants. If you look around, there aren't a lot of 750,000 SF pieces of space readily available in Midtown."

Despite the general optimism for its product, however, Forest City Ratner has declined to comment at this time, as did Insignia/ESG, the reported future broker for the Times tower.

But Gordon Ogden, of Byrnam Wood, summed up what pretty much everyone else in the City is thinking.

"I think that there is a good market for new product out there," he said. "It's just a function of whether they can be reasonable enough on the rent."

COPYRIGHT 2001 Hagedorn Publication
COPYRIGHT 2001 Gale Group