11, 2001, attacks and the 2008 global financial crisis, many offices in lower Manhattan were turned into luxury condominiums or rental buildings.īut many of those downtown conversions took place in buildings from the late 19th to early 20th centuries, which had smaller floor plates and better light, making them more attractive for housing units. The obvious solution to lower office demand in a city straining for affordable housing may seem to be converting the buildings into apartments. Image from Durst Organization and March Made LLC/Bloomberg Durst has signed three leases at the building, totaling 45,000 square feet.ĭurst installed new glass that changes color depending on the sunlight. Smaller floor plates spanning 10,000 to 12,000 square feet in the upper part of the tower could draw interest from boutique firms seeking less space than vast, open layouts. Durst's renovations included new glass for upper floors, new heating and cooling systems, an updated lobby and an outdoor wraparound terrace. The building, which reopens in October, will be the ultimate market tester for demand for upgraded Third Avenue space. When the lease expired in 2019, Durst explored a potential residential conversion but opted for a commercial upgrade. The Durst Organization has put roughly $150 million into renovating 825 Third Ave., a 530,000-square-foot, 40-story building that was largely left empty when tenant Advance Publications departed after 25 years. One large Manhattan landlord is betting that renovations will lure tenants to Third Avenue. He said his firm would have "little, if any, interest in Third Avenue right now." "In this environment, you can be in a lot better building in a better location at a similar rent," said Richard Litton, president of Harbor Group International, an owner of $19 billion in real estate. When Debevoise & Plimpton announced the move in 2020, Michael Blair, the law firm's presiding partner, touted the "truly modern, efficient and eco-friendly space," and said it will be "a highly functional workspace that will better foster the collaboration that is a hallmark of our firm's culture." The firm declined to comment further. Amenities include a penthouse clubhouse with panoramic city views, a lounge and open-air terrace. It will have 2.85 million square feet of offices and retail space, with cascading outdoor terraces, hanging gardens and sweeping views of the Hudson River. The Spiral, owned by Tishman Speyer, is a 1,031-foot (314-meter) tower set to be completed this year. (Bloomberg News parent Bloomberg LP, which already has offices in the building, took some of the law firm's space.) from Midtown offices.ĭebevoise & Plimpton LLP, an anchor tenant at SL Green Realty Corp.'s 919 Third Ave., signed a 20-year lease to relocate its headquarters to the Spiral, a new skyscraper by the Hudson Yards development, leaving behind more than 400,000 square feet. Brookfield Properties' Manhattan West project has drawn international law firm Clifford Chance and hedge fund titan D.E. relocated its New York corporate and investment banking business to the area. and Oxford Properties' Hudson Yards mega-development, while Wells Fargo & Co. are shifting their headquarters to Related Cos. Over the past few years, major finance, tech and law firms have been relocating to the west side of Manhattan, where a new crop of glassy skyscrapers has emerged to create a new business district. While New York has had some conversions, the hefty costs and zoning and architectural restrictions make it a difficult proposition.Īs cities try to recover from the pandemic, the towers along Third Avenue demonstrate the types of challenges faced by building owners in Manhattan and beyond. Some cities are exploring options to turn downtown offices to residential buildings: Calgary, for instance, has an incentive program for such redevelopments. There's no easy fix for landlords, who rely on rental income to pay down debt. The Third Avenue buildings have become "leave-behind space" rather than the types of offices that attract world-class tenants, said Nick Farmakis, vice chairman at Savills.
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