building at 53 W. 36th St. approximately
eight months ago) has noticed a growing
interest from media tenants in that building
and in the Times Square South area generally. He says these tenants are attracted to renovated buildings on side streets, which offer
full amenities but charge much lower rents
than buildings on avenues and arterial streets.
“There’s no one neighborhood to which
media companies gravitate,” Hidary comments. “These companies are very open-minded and are looking for a building that
will be proactive in terms of building out the
space the way the tenant wants it, and in
terms of general maintenance and upgrading. At the same time, they won’t pay the
rents that hedge funds and banks will pay.”
Since Hidrock bought 53 W. 36th, the
company has implemented a major capital
campaign, including “a new lobby and high-speed elevators, and tenants are getting
space to their specs at only about $45 per
sf,” says Hidary. “That compares to $60 for
equivalent space on Broadway or Fifth
Avenue—or $35 in a run-down side-street
building in the 20s or 30s.”
Hidary says it’s hard to generalize about
media tenants’ preferences, but most go for
loft-type space, with more than sufficient
lighting, open spaces, high ceilings, large
windows and highly polished concrete
floors. They’ll often want several conference
rooms, and the executives will often request
glass walls for their offices, so they can see
what’s happening in the bullpen.
“These tenants tend to be easy to work
with, very professional,” he adds. “Some
will say, ‘I want cheap-cheap rent but I’ll
pay for the build-out;’ others will pay a higher rent if we do the building for them. They
tend to ask for upgrades to the typical work
letter—but they’ll pay for it.”
It’s too soon to tell whether the West 30s
will become a new center for the publishing
and entertainment world, says Hidary, but
he sees it becoming the “fourth area” behind
Times Square (still the most expensive of the
four), Madison Avenue and Union Square.
“We just closed on 35 W. 36th St., three
doors over, and we’re signing a contract for
another building a block away,” he concludes. “I think they’ll also largely house
media tenants.”
Mitchell Konsker, vice chairman of
Cushman & Wakefield, sees the far West Side
becoming another center for media tenants.
“Quite a few media companies have large
lease expirations in 2010,” Konsker explains,
“and many of them would rather stay in
Midtown than move Downtown, including
Ogilvy. We were able to keep them in
Midtown by moving them to 636 Eleventh,
where they could consolidate their space and
have all kinds of amenities like a cafeteria,
health facilities, multiple outdoor terraces, a
more open layout—and as much light and air
as possible. Like many media tenants, Ogilvy
is very amenities-driven and likes to encourage interaction between its employees.”
Ogilvy’s new address is a considerable
trudge from Penn Station and Grand Central
Terminal, so Cushman negotiated with the
building’s owner, the Hakimian
Organization, to provide shuttle transportation to and from both rail hubs.
“Many of the companies whose leases were
expiring in 2010 were facing rents of $80 to
$100,” Konsker says. “At the new address,
Ogilvy is paying in the mid-$50s, and Daniel
J. Edelman, the public relations firm, will be
moving to 250 Hudson St., a neighborhood
where the rents are in the mid-$40s.
“These companies are not growing so
much as they’re coming out of smaller floor-plates, looking for reduction of occupancy
costs. Typically the owners give the tenants
work letters, and the tenants build the space
out to suit their needs. The entire corridor of
ABRAHAM HIDARY
Hidrock Realty
“There’s no
one neighborhood to which
media tenants
gravitate.
These companies are very
open-minded.”
Eleventh and Twelfth avenues has been legitimized by the Ogilvy deal, and I’m already
speaking to multiple landlords about what
we’ve done at 636. Meanwhile we’re representing 330 Hudson St., a new construction,
where media tenants are already circling.”
There’s no question that the area around
Hudson Square is currently very fashionable
in the eyes of the “new media.” Jason Pizer,
Trinity Real Estate’s senior vice president of
real estate leasing, feels that the evolution of
Hudson Square as a creative hub is by no
means a product of the real estate industry.
Rather, it’s an organic phenomenon that has
grown over time.
“Trinity’s ability to attract media tenants
to Hudson Square had more to do with
serendipity than a specific plan to court a
particular industry,” he insists. “Trinity was
looking to upgrade its holdings and convert
underutilized warehouse and industrial loft
space into commercial office space. Much
of that space had been used by ‘old media,’
mainly the printing industry, which were
leaving the city due to the high costs of operating factories in Manhattan. This type of
space is appealing to creative types, plus the
rents in the area were and are very competitive. Advertising firms such as the former
Della Femina agency were among the first
companies to rediscover Hudson Square
and relocate here from Midtown, and now
media tenants are helping Hudson Square
become a 24/7 community since they often
work outside of traditional hours. Also, they
tend to have younger employees, who bring
a lot of energy to any neighborhood.”
The Astor Place/Cooper Union area has
long struck many observers as an ideal neighborhood for media companies, due to its proximity to prestigious schools and a youthful
demographic. Over the past few years, the
area has been gradually realizing its potential.
The publishing giant VNU (now the Nielsen
Co.) moved to 770 Broadway at the turn of the
millennium, and various other media firms
and “ dot.coms” came into the area as well.
Paul Travis, managing partner at Washington
Square Partners, says that his firm has been
working with Cooper Union on a master plan
to get the best use out of its real estate in that
neighborhood and perhaps form alliances
with the many media tenants nearby.
“The master plan rezoning has transferred
square footage around, focusing on the engineering site that runs from Astor Place to East
Ninth Street, from Third to Fourth avenues,”
he says. “We want to consolidate the academic program in the Cooper Union building,
and build a new academic building further
downtown. Key to these changes was the real-ization that there was tremendous potential in
this area for major office development, which
would feed off other changes happening in the
area. The clearest example of this change is
770 Broadway, which had been back-office
space for American Express and now houses
Nielsen, AOL and J. Crew, among others. It
could hardly be more different.”
While some observers thought these companies moved because of low rents, Travis
says, “Many other factors were involved. It’s
about labor force, the ability to attract workers, many of whom already know and like
the Astor Place area. This neighborhood provides the ‘value added.’”
Travis expects the next media boom to
happen in downtown Brooklyn.
“More creative professionals now live in
Brooklyn than in Manhattan,” he asserts.
“Downtown Brooklyn has more college students than Cambridge, MA. It’s now what
Astor Place was 10 years ago. People used
to think of downtown Brooklyn as back-office space for financial services compa-
