Turning old into new again will draw tenants to Midtown, which is still the best neighborhood in Manhattan, according to L&L Holding president Robert Lapidus.
Discussing the company’s substantial overhaul of 390 Madison during the NAIOP Reposition, Reimagine, Revitalize panel yesterday (Tuesday) Lapidus said, “Midtown — for all of the talk about all of these alternative areas — Midtown’s location is awesome.ˮ
Lapidus pointed to the abundance of transportation and well-established infrastructure in Midtown as invaluable draws for the area, but conceded that “commodity” buildings — such as his current project at 390 Madison — need an overall if the neighborhood is to compete with evolving commercial sectors in other spots.
“(Midtown) is still great. Tenants today want new product. So in Manhattan, that’s why Hudson Yards and World Trade Center sights are doing well,” said Lapidus. “The infrastructure downtown is really transforming near the World Trade Center and Hudson Yards. I’ve spoken with many of the tenants in the Hudson Yards. They didn’t necessarily want to go there. I mean the 7 line is not enough there. You’re going to be living in a construction site for ten years. New York needs it though.
“Even though the location is not great today from an infrastructure point of view,” Lapidus continued, “tenants wanted new and they were willing to give up a, quote un quote, better, more typically great location to be in new product.”
The massive overhaul of 390 Madison is on behalf of owner Clarion Partners. With a KPF Architects-designed re-build, the company is aiming to fill a void for new office space in the Midtown East market by doing what it did at 200 Fifth Avenue, create “a very hot, chic building.”
Speaking at the NAIOP event, Lapidus said, “The beauty about Manhattan is, when something is down then that’s the future upside for people to take advantage of those opportunities. “Look at what Vornado did at 1290 [Avenue of the Americas]. They took a building that was not great shape, spent a lot of money on it and released it.
“The challenge and the opportunity is, take great location product like 390 Madison and make it new,” said Lapidus. He pointed out that while projects such as Manhattan West and Hudson Yards may be currently underway, the reality is that the percentage of available office space in the borough that is new construction is actually “a very small piece.”
“If you have commodity buildings anywhere, it’s not a good place to be,” said Lapidus who envisions a much more modern workspace for tenants at the re-imagined Madison Avenue building.
He feels that Midtown’s location will always draw heavy interest, but offering the same amenities as new construction in less prime areas will insure that the neighborhood stays as the prime destination.
“Companies want to attract the best employees, they want to create great cultures for them, they want them to be in a place where they want to go to,” said Lapidus.
“It’s not like a 9-5 environment anymore. It’s a 24/7 type of culture, so you want to create the experiences in and around the office building that are going to attract the best employees and obviously improve everyone’s bottom line.”
390 Madison will be open in 2017 coated in reflective class. The new building will be taller than it’s predecessor.
“If you can create specialty buildings and do special things with them, you’re always going to keep the buildings leased and in an up market you’re going to get the highest rents.”
Lapidus suggested that L&L would have considered an even more ambitious endeavor at what is now 380 Madison, but current zoning restrictions would not allow a complete rebuild. He described potential rezoning in Midtown as something that “needs to happen.”
Lapidus was joined on the panel by Robert Jackson, executive vice president of The Rockefeller Group and Seth Pinsky, executive vice president of RXR. Jackson discussed upcoming renovations at 1271 Avenue of the Americas and Pinsky discussed RXR’s plans for Pier 57.
Aaron Twersky, president of Bricks & Sticks Communications, moderated the panel, which was held at 1271 Avenue of the Americas.