http://www.nypost.com/seven/09232008...362.htm?page=0
DURST EYES CONDE NAST STAYING
September 23, 2008
HOPING to turn the current financial chaos to its long-term advantage, the Durst Organization has "reached out" to media giant Condé Nast "with a proposal to stay" in its present home at 4 Times Square when its lease expires in 2019, real estate and media sources said.
The company led by Si Newhouse has previously said it will need more space than its 800,000 square feet at Douglas Durst's tower, and was to be the anchor tenant at Hudson Yards had a Durst/Vornado team won the MTA's nod for development rights there.
Those rights eventually ended up with Time Warner Center developer Related Cos.
Since then, sources said, Condé Nast has been talking both to Related about a move to the yards and to Brookfield Properties about its own development site on Ninth Avenue in the 30s.
Since the rest of 4 Times Square will be occupied by law firm Skadden Arps even after 2019, it wasn't immediately clear how Condé Nast could stay there and expand at the same time.
But a source pointed out that both the Related and Brookfield projects face public review and engineering challenges that raise questions about delivery schedules.
"Si is getting on and he wants a decision to be made soon, rather than wait until 10 years from now," the insider said.
Condé Nast's broker, CB Richard Ellis tristate CEO Mary Ann Tighe, declined comment, and calls to the offices of Durst and Brookfield were not immediately returned.
Related Cos. Chairman Stephen M. Ross politely said yesterday, "I'd rather not answer" when we asked him if Related was talking to Condé Nast.
But Ross was more than willing to talk about the Wall Street meltdown, which has hung question marks over everything down to a tiny retail space at 1796 Broadway - where sources said Prudential Douglas Elliman's Faith Hope Consolo recently nailed down a lease with Washington Mutual, a bank that's unlikely to survive.
"Too many people are too fast to want to talk doom and gloom about the New York real estate market," said Ross, who's confident about Hudson Yards but suggested a go-slow might be in the works at an Eighth Avenue development site.
"I don't think anyone has a handle on it yet.
"First, the real estate industry lags the rest of the economy. Nobody knows yet how many square feet really will be put back on the market.
"Companies have expanded and companies that need large blocks of space will still have those needs and must plan them way in advance.
"So, on new buildings at Hudson Yards, I don't think that what I like to believe is an aberration will affect those plans."
Ross downplayed predictions of a sublease glut.
"It doesn't mean there won't be additional space," he said. "But, during the last downturn, companies that put lots of floors on the market found it cost them a lot more after the upturn to go out and find new space when they needed it again."
Besides Hudson Yards, Related also hopes to develop Moynihan Station. Plus, it's already demolishing old buildings to prepare a new office tower site on Eighth Avenue between 45th-46th in partnership with Mort Zuckerman's Boston Properties.
Asked about the latter project, Ross said, "Could something like this be delayed? It could be - we have to look at the market and assess it with Boston."
Ross pointed out that Merrill Lynch and American International Group have both been substantially rescued. Major portions of Lehman Brothers will also survive and its headquarters tower at 750 Seventh Ave. is being scooped up by rescuer Barclays Plc.
The fact that not only 750 Seventh, but also much of Lehman's total 6.2 million of Midtown space, will not be dumped on the market also gave comfort to SJP Properties Chairman Steven J. Pozycki.
SJP is putting up the only large, speculative new office and retail tower in Manhattan, glamorous 11 Times Square at Eighth Avenue and 42nd Street.
It started the project in the expectation that when finished late next year, it would be the only 1 million square-foot location available in Midtown.
Although 750 Seventh, completed in 2001, is not as new as 11 Times Square, it's a first-class building with an arguably better location, and may have spelled competition for tenants.
Had parts of Lehman not been rescued by Barclays, Pozycki said, it would have created a "giant void. Clearly, Barclay's commitment buttresses the Times Square market," he said.