The Moinian Group is moving ahead with construction of its 1.8 million square foot office tower in the Hudson Yards neighborhood, even without an anchor tenant locked up.
The developer has started work on the foundation of the 66-story 3 Hudson Boulevard, expecting to have an anchor tenant in place by the time the building starts to rise above the ground, Bloomberg News reported.
“We do feel confident, very confident, that the building will lease,” Joseph Moinian said. “That’s why we are putting this kind of money — all cash — into starting the foundation, to bite into the time” that it would take to complete the tower.
A portion of the building’s foundation has already been completed as part of the Metropolitan Transportation Authority’s extension of the 7 train subway, which has an entrance right outside the proposed $2 billion tower’s front door.
In order to receive $65 million worth of tax exemptions for the project, which is between 34th and 35th streets on 11th Avenue, Moinian reportedly had to procure “sufficient financing to proceed with full construction” of the tower by earlier this year.
Moinian and his financial backers are putting up as much as $100 million to lay the building’s foundation, and will complete financing once the anchor tenant is in place, according to Bloomberg.
Avison Young’s Arthur Mirante, who is leading the leasing effort at the building, said he’s in talks with a tenant who would take 1 million square feet, or two that would take 500,000 square feet each, and expects to sign one soon.
Michael Cohen of Colliers International, though, told Bloomberg Moinian has his work cut out for him in courting tenants. He faces stiff competition from big office developers such as Related Companies, Brookfield Property Partners and Tishman Speyer. Related has already filled much of the office portion at its two Hudson Yards towers, and Brookfield inked law firm Skadden, Arps, Slate, Meagher & Flom to 550,000 square feet at Manhattan West.
“I think he will have a higher burden of proof than the other three to show he has the wherewithal to deliver,” Cohen said.
In fact, Tishman in March said it wouldn’t begin construction on its two towers near the Jacob Javits Center until it locked in anchor tenants.
According to a recent analysis by Savills Studley, roughly 29 million square feet of offices are proposed or under construction in Manhattan, with about 23 million square feet still unleased. [Bloomberg] – Rich Bockmann