Well he definitely wouldn’t build just a hotel on 421 7th Ave as he plans to build one single commercial building on the whole site, he wouldn’t break up the sites.
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There’s a nice little building under all that crap. I don’t know if it could be saved at this point.
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To this I say only bye bye.
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Developers punt on new office projects
Top developers are punting on new office projects as workplaces face uncertain futures.
High vacancy rates and dwindling leasing demand have pushed developers to delay significant office projects either in the planning stages or already underway, the Wall Street Journal reported. People familiar with the matter told the outlet firms including Vornado Realty Trust, Brookfield Asset Management, Hines and Kilroy Realty are backing off of the sector.
Low demand and economic uncertainty occasionally leads developers to go full-throttle on office development, anticipating the ebbs and flows of the market; major projects could take years to complete. But interest rates are high and the future of office work has never been less clear.
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Developers punt on new office projects
“There’s increasing uncertainty in the world, and tenants are acting accordingly”
National
Nov. 09, 2022 09:45 AM
TRD Staff
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Vornado Realty Trust chairman Steven Roth (Photo Illustration by Steven Dilakian for The Real Deal with Getty)
Top developers are punting on new office projects as workplaces face uncertain futures.
High vacancy rates and dwindling leasing demand have pushed developers to delay significant office projects either in the planning stages or already underway, the Wall Street Journal reported. People familiar with the matter told the outlet firms including Vornado Realty Trust, Brookfield Asset Management, Hines and Kilroy Realty are backing off of the sector.
Low demand and economic uncertainty occasionally leads developers to go full-throttle on office development, anticipating the ebbs and flows of the market; major projects could take years to complete. But interest rates are high and the future of office work has never been less clear.
In the country’s 54 largest markets, there is 156 million square feet of office space construction underway, according to CoStar, down from 186 million square feet in the first quarter of 2020. Meanwhile, the national office vacancy rate is 12.5 percent, the highest since 2011.
“There’s increasing uncertainty in the world, and tenants are acting accordingly,” Vornado Realty Trust president Michael Franco said last week in the real estate investment trust’s third-quarter earnings call.
CEO Steven Roth in the call cast doubt on the Hotel Pennsylvania site, where demolition is on track to be completed by the end of next year.
“I must say, the headwinds and the current environment are not at all conducive to ground-up development,” Roth said, demurring when asked if Vornado is considering non-office uses for Penn 15.
Nearly a record amount of space under construction is not pre-leased, another worrying sign for developers. Approximately 37 percent of space under development is available, according to CoStar, more than doubling the rate from 2019 and approaching the 39 percent record set in 2008.
Flailing demand for office space is exemplified by subletting trends as companies declare they no longer need the amount of space they did prior to the pandemic. CoStar data show 212 million square feet are available to sublease in the country, the highest amount since the firm started tracking the metric in 2005.
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Thanks.
This is a once in a lifetime opportunity to redevelop 350 Park since it and Rudin’s adjacent building will be virtually empty.
Also, it’s more of a boutique (by NY standards) building since I believe that it will be only about 1.6 m sf, unlike 15 Penn which will be over 2m sf.
Also, 350 Park will get astronomical rents. It will be the new GM Building or 9 W 57th.
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Penn 15 will get built on spec.I don’t see the site just sitting empty for years & years. I would say Vorando will probably build a residential or office tower on top Gimbels building rather than demo ( I am all for that because I love that building and the bridge). For the sites where penn south would be, that depends on what the Federal EIS says & other things that I’m not going to go into. Time will tell I guess
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I’d love to see a tower on top of Gimbel’s, and if Macy’s follows through they will be twins
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I have heard from Vornado themselves (prior to the recent announcement) that this building (or any other from the broader plan) would not be built on spec.
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So then Vorando wants a company signed before construction starts. If that’s the case well shit…
Hopefully it’s not a 2 WTC or 3 Hudson BLVD situation
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Does that mean this plot can sit empty for quite some time after demolition is completed?
@tjr101 Its definitely possible, especially if they don’t decide a plan to move forward after 2023 or see the economic climate getting better in their view.
@TheBigApple The Gimbel’s building (site 8) is in the same boat as sites 1, 2, and 3 (Penn South sites) as it’s not owned by Vornado, so if it ends up being residential or commercial is up to the developer that buys it/develops the site. Sites 2 and 3 only have commercial options and site 1 has a commercial vs mixed use option. Think you meant Final in FEIS.
Otherwise this project is in a whole different situation when compared to 2 WTC and 3 Hudson Blvd.
@mcart I’d assume you mean twins in the sense they are both built atop dept stores. But if Site 8 is commercial or not will decide if their massing are more alike in size, the residential option is very small compared to the commercial option, which “would” make it look about the same size as the proposed Macy’s tower even though Gimbels would be demolished in that case.
I did not mean they would be twins in the sense of the twins towers or pretonas towers, like actual twins
I thought The Gimbel’'s building (Site 8) is owned by Vornado. Yes, I meant FEIS was a busy day at work,lol.
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But what are actual twins if the Twin towers and Petronas Towers arent twins? 
@TheBigApple ah, my mistake apparently Vornado does own the Gimbels building, interesting that they dont show it as them owning it or including it in their Empire Station complex plan. I had also thought they owned it (due to a render) until I didnt see it highlighted in their property plan.
They are. I must be writing this wrong. I just meant the Gimbel’s site and Macy’s would be twins in the sense that they’re both over the top of those department stores, unlike the Twin Towers which were actual twins
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Are you currently on the subject of ESC?because you are talking over Tower Site x in the ESC.
Could the demolition of the old Penn Hotel still be stopped? Will Vornando’s current plan be put on hold?
I don’t imagine the current demo will be stopped due to Vornado’s current sights on the future. They are just kind of putting all their future work on the back burner for 2023. Demo is still planned to be completed at the end of 2023, its just after that if they decide to move forward or leave the lot empty.
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Vornado let the Alexander’s site sit empty for years.
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They could make a fortune just as a parking lot.
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