KKR Passes On 300K-SF Tishman Speyer Office Near Hudson Yards
By Mark Hallum November 23, 2022 2:14 pm
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KKR is joining other major companies in reconsidering office expansion plans.
The investment firm, which has $500 billion in assets, revealed Wednesday that it is putting the brakes on growing its headcount and reconsidering its future New York City offices needs in Hudson Yards at Tishman Speyer’s Morgan North, Business Insider first reported.
KKR had previously been considering a 300,000-square-foot space on the upper floors of the renovated postal facility, but is now sitting on the fence as an economic downturn looms, according to the report.
A source with knowledge of the discussions for the space, however, told Commercial Observer that KKR had never formally signed a lease and that plans were not far enough along to provide a projected headcount at this potential office. Any real commitment would have been a couple of years into the future.
The source added that the firm had been undergoing a number of years of growth and had been looking at multiple spaces in the city until executives decided that the company could level off its hiring.
KKR and Tishman Speyer declined to comment.
The investment firm weighing different office assets comes as other big companies have canceled plans to expand footprints or even shrunk their current portfolio.
Amazon, Google, Lyft, Spotify, Twitter and Snap all announced over the summer that they would cut back on employees and office space.
One company that is actually spending money to save money on office space is Facebook’s parent company, meta, which disclosed in a third-quarter investors call that it will drop at least $2.9 billion from the end of this year through 2023 to shrink its office footprint globally after instating a hiring freeze. But the social media firm did move into the 730,000-square-foot office space in Vornado Realty Trust’s office portfolio in Moynihan Train Hall that it leased in 2020.
Overall, office leasing in Manhattan dropped 40 percent from September to October, despite 2022 being a strong year compared to 2021, data from Colliers showed.
Midtown, the breadbasket of Manhattan commercial real estate, saw only 580,000 square feet of leases signed in October, a 50 percent dip month-over-month and a 61 percent reduction compared to October 2021.
Mark Hallum can be reached at mhallum@commercialobserver.com.
