While the story in Midtown South over the past two years has inarguably been Class B and, to a lesser extent, Class C buildings and their increasing cachet among tech startups, the story in lower Manhattan is still all about Class A properties. With approximately five million square feet of new inventory coming online next year with the completion of 1 World Trade Center, the market will boast some of the most efficient and modern space in all of Manhattan.
More immediately, however, approximately two million square feet of space at the World Financial Center is expected to be made available by next month, thanks to lease rollovers by Nomura and Deloitte, among other major tenants. With such availability of Class A space, no wonder the asset class saw a 30 percent uptick in leasing from last February. Jonathan Mazur, director of research at Cushman & Wakefield, clued The Commercial Observer in on some other big statistical changes in lower Manhattan last week and gave us a sense of what’s to come in 2013.
The announcement last week that Liberty Mutual had signed a 10-year, 120,000-square-foot lease at 55 Water Street was a rare and welcome piece of good news at a building and corridor of lower Manhattan exceptionally hard-hit by Superstorm Sandy.
The 53-story Financial District skyscraper took on 32 million gallons of water following the October 29 natural disaster. A month later, 30 people were treated for injuries after the basement caught fire during electric repair work. News that Liberty Mutual would be doubling its footprint in the property no doubt came as a relief to the landlord, New Water Street Corp., as it poured $200 million worth of renovations into the ailing tower.
The woes of the building at 55 Water Street are emblematic of those afflicting Manhattan commercial properties affected by Sandy. Accounting firms working on their behalf as they seek damages are all too familiar with the sort of cascading problems wrought by the storm that require a web of insurance plans and clauses spanning wind, flood, blackout and business interruption insurance.
Liberty Mutual has signed a 10-year, 120,000-square-foot lease at 55 Water Street, a success story to emerge amid a massive renovation project launched in response to a string of misfortunes brought by Hurricane Sandy.
The insurance company doubles its space in the building with the deal, moving from the 18th floor to the 22nd and 23rd floors.
“It’s great news for the landlord and it’s great news for Downtown,” said CBRE’s Brad Gerla, who represented the landlord with Mary Ann Tighe, Howard Fiddle and Evan Haskel.
New Water Street Corp. is putting $200 million into the building after it took on some 32 million gallons of water during the storm. The project includes the transport of key electrical, mechanical and communications equipment to the 3rd floor and storm-proofing to protect against future disasters.
“This landlord went over and above to secure the building and to make sure that something like this doesn’t happen again,” Mr. Gerla said.
On Thursday, Nov. 1, Virgo Business Centers made 27,321 square feet of temporary, furnished office space available at 14 Penn Plaza. Companies displaced by Hurricane Sandy filed in one by one, and by the following Thursday, the space was full.
“Typically, that process takes about a year,” said Pasha Erkin, director of sales at the company. “It’s all about readiness. You could literally bring me 40 people today, and I could have the space ready tomorrow. All you have to do is walk in, flip on a switch, plug in and start working.”
In that building alone, the company took on 177 employees from displaced companies like Coronet, amfAR, Linda Decorato, Ambrose and others located on the eastern tip of Downtown and other areas hit hard by the hurricane.