[NYguy]

Originally Posted by BrownTown

Well yeah, if you set your time horizon long enough you will eventually be right I guess. But in the same vein all those ghost cities in China are eventually going to fill up too.

I don't know why people continue to bring up what's going on in other places, as if it matters here. We're talking about New York, with all of the history and the precedent of how things are done in New York. Could care less about the "ghost cities" of China. The entire original WTC complex of 10 msf was built on spec, all Downtown, and at a time when other new office space was being built Downtown as well. Yes, it took time for the complex to fill up. And yes, most of the complex is already built, and filling up as we speak. This tower wouldn't be able to take in any tenants for four years. There's NO major new office space being built Downtown.



https://nypost.com/2019/02/11/specul...to-the-market/

‘Speculative’ building is creeping back into the market





By Steve Cuozzo
February 11, 2019

A specter is stalking the city’s commercial real estate market — the specter of spec.

Constructing offices without pre-signed tenants, known as “speculative” building, has long been the bane of developers and landlords who weren’t the ones doing the building.

Brookfield Property Group plans to build Two Manhattan West (1.9 million square feet) even before inking any deals. BPG Chairman Ric Clark told us, “With the first four million square feet of office space at Manhattan West already 92 percent leased, combined with enormous demand for Two Manhattan West we’ve seen already, we are eager to bring the building on-line as quickly as possible.”

On Monday, Larry Silverstein said he might launch long-stalled Two World Trade Center’s 2.8 million square feet without pre-signed tenants as well.

“I think we’re in an increasingly good spot, in a good position” to do that, he told Bloomberg.

According to CBRE, of Manhattan’s total 15.3 million square feet of offices under construction right now, some 3.07 million square feet are speculative — a surprising 20 percent. One reason the phenomenon’s been overlooked is that it’s scattered.

Some 1.17 million square feet of the new spec supply are in eight “boutique” buildings — of which Trinity Real Estate’s 68-74 Trinity Place (310,000 square feet) is the largest.

In Brooklyn, meanwhile, Tishman Speyer’s 10-story The Wheeler, going up on Fulton Street, has 622,000 square feet of first-class space up for grabs.

Several large, proposed Manhattan projects also have spec potential, including Harry Macklowe’s supertall Tower Fifth near St. Patrick’s Cathedral and TF Cornerstone and MSD Partners’ redevelopment of the Grand Hyatt Hotel on East 42nd Street, which would mostly be for offices.

Both projects need public approvals. The developers sound like they’d otherwise start digging tomorrow but have said nothing about tenants. They didn’t get back to us on whether they’d build without them.

Some projects that aren’t fully spec are almost-spec. SL Green’s One Vanderbilt near Grand Central Terminal is now more than 52 percent leased ahead of its August 2020 opening. Yet SLG had pre-leased a mere 200,000 square feet of a total 1.52 million to TD Bank when it started building.

CBRE’s Mary Ann Tighe, who reps 550 Madison, noted that even if all of the potentially spec projects go up, their completions would be stretched out over several years, so their market impact would more than likely be negligible.

She added, “New office buildings [with or without tenants] represent a tiny percentage of the [414-million-square-foot] office market and for good reasons,” including lack of “viable” land, political and neighborhood resistance and sky-high construction costs.

She said that “a spec building is a multibillion dollar gamble and few [developers] have the credibility and staying power for risk on that scale.”

Even so, she said that most tenants of more than 50,000 square feet needing to move choose to relocate to all-new buildings or to major makeovers such as 550 Madison Ave. and 1271 Sixth Ave. “Going spec is rare but usually rewarded unless a development hits during a severe financial downturn,” she said.

JLL regional president Peter Riguardi said the notion of a “wave” of spec development “is more smoke than fire.”

He suggested that “some developers say they’re going to do it, to generate interest in projects and get a buzz going” — although he said he wasn’t including Two Manhattan West in that.

The fate of Two World Trade Center, the missing link in the great downtown complex, might be the most intriguing situation. We couldn’t reach Silverstein to expand on his comments.

But, “Larry is a man of his word,” said Durst, who’s the operating partner in One World Trade Center and competes for tenants with Silverstein’s Trade Center towers.

https://www.bisnow.com/new-york/news...-leasing-96357

Manhattan Had Its Best Office Leasing Market In 17 Years In 2018

January 7, 2019
Miriam Hall

Just under 42M SF was leased in the borough in 2018, according to Colliers International research, including new leases, renewals and expansions. That was up 13% from 2017’s total of 37M SF, and the highest yearly lease volume since 2001.

Rents were also strong, with the average asking rent for the borough hitting just shy of $76 per SF.

Meanwhile, CBRE’s figures showed 2018’s new leasing and expansions total — which hit 32M SF, according to the brokerage — surpassed the average annual figure over the past decade by 26%. “This year has bettered any year in the last two market cycles,” Colliers International Executive Director Craig Caggiano said. “The total of 41.75M SF, I mean, really is a remarkable number.”

Brokers put the strong year down to a few major factors. Business and job growth, along with a robust economy, is keeping the market healthy. Financial, insurance and real estate, known as FIRE, tenants took some of the city’s most significant deals, and coworking and flexible office space providers (which fall under FIRE) expanded rapidly throughout the year.

Meanwhile, some of the world's biggest companies propelled the leasing market forward, with deals like Deutsche Bank’s 1M SF move to One Columbus Circle, JPMorgan's renewal for 855K SF at 277 Park Ave. and Pfizer’s lease at Tishman Speyer’s Hudson Yards tower, known as the Spiral.