Despite tough times for office leasing, Edward Minskoff’s luxury office tower at 51 Astor Place — set to premiere in May — will still ask rents as high a $115 per square foot, the New York Times reported. The developer is hoping the neighborhood’s quirkiness will attract technology companies.
Minskoff, profiled by The Real Deal, is building the 400,000-square-foot, 13-story tower after receiving a $165 million loan last year. He is kicking in $135 million of his own money.
The land for the project, designed by Japanese architect Fumihiko Maki, was leased from Cooper Union for 99 years. The nonprofit university relocated its engineering school to nearby 41 Cooper Square, despite community opposition.
Now, Minskoff is looking to the neighborhood to add to his building’s appeal.
“You’ve got life down here, so it’s safe at night when 25-year-olds leave work,” he told the Times.
Minskoff wants to get $88 per square foot for the lower 42,000-square-foot floors and up to $115 per square foot for the upper 25,000-square-foot floors.
But Minskoff’s target could be too high, brokers say. The average asking rent in the area in the first quarter of 2013 was about $50 a foot, according to commercial brokerage Avison Young. Even in the chic Plaza District, rents hover around $80 per square foot, brokers added.
The prime buildings near 51 Astor Place have a 13 percent vacancy rate, Avison Young added, compared to other enclaves of Midtown South such as Hudson Square, where vacancy rates are eight percent.
Microsoft had expressed interest in being a tenant, Minskoff told the Times, but the software behemoth is rumored to have taken space at 11 Times Square for roughly $60 a foot. Other technology companies also have done the rounds of the Jones Lang LaSalle-marketed building, but no deals have been struck yet.
Minskoff may have to settle for the more-humble $80 a foot rate, Greg Kraut, an Avison Young principal who is not involved with the project, told the Times, if he wants to compete with Vornado Realty Trust’s 770 Broadway.[NYT] – Hiten Samtani