350 Park Avenue in Minecraft
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“This expansion marks a significant commitment by one of the financial industry’s leading firms and signals an important part of New York’s recovery,” Bill Rudin, CEO of Rudin Management Company, said in a statement.
The deal brings the firm’s presence in the tower to about 720,000 square feet, and Blackstone renewed all of its space to 2028, Rudin said.
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Dang, so looks like this won’t be going up for a while
Edit: whoops, that’s a different rebuilding
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Blackrock will still be in Rudin’s building until 50 HY opens, and it will take a long time to demolish the two buildings. Seven years sounds like a reasonable time frame to achieve all of this.
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Blackstone and Blackrock are two different companies, no?
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Yes. That’s correct.
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It would seem that 350 is almost the better site than Hotel Penn, just given that the neighborhood is already there, and there are a lot more people being excited by the commuter hub and you have East Side access coming in the next few years.
So what are your thoughts on accelerating 350 and where does that fit in your pipeline as you guys are flat market anchoring a Hotel Penn versus getting tenants to anchor at 350?
Steven Roth:
We are an equal opportunity employer, wherever the tenants want to go, that’s where we want to put them. We have - obviously, we have an enormous amount of respect for our 350 Park Avenue asset, it’s a great asset and it’s kind of like bite-sized. It’s a 500,000 square feet asset. It’s obviously a candidate for teardown and rebuild.
But in teardown and rebuild is a combination and we can grow the site too, by the way, as speculated in the press. So we could grow it so that it’s more than 2 million square foot building if we wanted to just focus on our own site without growing it, which would be a million square foot building.
That is an immense financial undertaking which would require record rents, which we have talked to several tenants about, and we may do that, but the likelihood is we will not do that. The more likely outcome is that we will rent up the existing 350 Park Avenue at very favorable rents and so it would like postpone it for a cycle, and retain the option of doing a new build on it or continuing to rent the existing building the over time.
So it’s more likely that we will not do a teardown on that site and rent it out for one more cycle, and focus our efforts on the Penn Station district. That’s the more likely outcome, although we couldn’t be more delighted.
By the way, if we decided that we wanted to sell that asset with all of its optionality in terms of the new build or whatever, we think we can get an extraordinary price for it, but that’s not something that’s high on our agenda right now.
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That stinks
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So we can assume this building is on an indefinite hold, similar to One Park Lane, South Seaport, etc.
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I’ll bet that One Park rises sooner than we think.
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But will it be at 1200 feet?
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Who knows, but this is the best residential site in the city. There will be massive demand for it.
I don’t see the Seaport building rising as condos. Very rich people don’t want to live in that area.
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I think this is a bad call on Vornado’s part (but aren’t all their calls bad?)
350 Park is a way nicer address than the Penn area will ever be, and right now the luxury office market is where the money is at.
Luxury offices are places where rich people enjoy commuting to: think Citadel employees power lunching on Michelin-level food at 425 Park while gazing out of the diagrid.
Even semi-luxury offices like WTC or Brookfield place with adjacency to nice food courts, green space, and classy retail are attractive to tenants who have been remote for covid.
But in the budget office market, like the Penn area, those kinds of workers are much more likely to stay remote in the future, or at least be outsourced to other, cheaper metro regions. The reason the buildings near Penn have been cheap is because those buildings were made for warehousing workers who cannot afford the city and commute from NJ and LI. Plaza district buildings cater to people who take Yellow cabs or Ubers to work every single day, or take the Metro North from CT (which is generally a high-income crowd).
In the post-covid environment, companies paying rent at places like Two Penn to warehouse employees making ~50-75k/yr have no incentive to keep spending money on that.
For example, in Lower Manhattan, Goldman Sachs has trading floors teeming with people (and will call all remaining employees back next month), and law firms at Brookfield Place have strong in-person presences. By comparison, the Bank of New York building across West st., where employees make a quarter the salary of those places, is empty.
Trying to make Penn into a luxury address, when there are millions of luxury space available on Hudson boulevard, which is already a luxury address, is reckless and tempting fate. Hotel Penn is surrounded by trash and is unlikely to attract a top-tier anchor tenant. Would you rather have an address at, say, The Spiral, 2 WTC, or Project Commodore, or at Penn Station?
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A very good analysis of the impact the Covid pandemic will have on cities going forward. Technology has advanced to the point where many companies are able to have a large portion of their workforce at home. Seems like Covid was the push needed to make that a widespread reality.
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Honestly I’m calling all bs to this remote working. I’ve had to go to work this whole time and I’d go insane if I had work from home. I’m even an extremely introverted person and I actually look forward to going to work cause it’s a healthy time to interact with people. Staying home for days on end has to play hell on your brain. I genuinely think you’d be more productive in an office setting than home. I mean this isn’t the general rule for everyone. But I’m so tired of seeing things about office space isn’t coming back. We’re humans, we have to interact with each other to stay sane. Plus everyone I’ve met who’s has to do stay at home work, liked it at first, but grew to hate it.
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Congratulations to you for liking your coworkers 
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I feel the same way about going into work, but it’s not workers making these decisions — it’s the boards of corporations, who see the potential for huge savings/increased profit margins by downsizing office space.
Isn’t capitalism a joy?
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