A leasing team from Newmark Knight Frank is marketing space at 1700 Broadway after the recent departure of one of the building’s major tenants, the Hearst Corporation.
Hearst occupied a smattering of floors in the 600,000 s/f, 42-story building, including the 36th, 37th, 28th to 30th floors, and the 20th floor. Its former space totals around 80,000 s/f. The publishing company is relocating much of its operations to its headquarters building at 300 West 57th Street at Eighth Avenue.
With approval from 1700 Broadway’s landlord, the Ruben Companies, the Newmark team will carve the 20th floor, which is roughly 13,500 s/f in size, into prebuilt office units that cater to smaller users, an active portion of the leasing market.
1700 Broadway presents an interesting leasing challenge. Although the building’s roughly 13,500 s/f floors are appealing to a large segment of the city’s tenant base, those larger tenants typically prefer to spread themselves on as few floors as possible. There is enough available space in bigger buildings in midtown, which could make multi-floor deals a tough sell at 1700.
By prebuilding the 20th floor, the Newmark team, led by the company’s New York area president David Falk, senior managing director Peter Shimkin and managing director Daniel Levine, hope to build momentum with smaller users. The team is also overseeing the conversion of a little over 9,000 s/f on the building’s 16th floor into two prebuilt spaces about 4,000 s/f and 5,000 s/f apiece. The rest of the 16th floor is leased to an existing tenant.
Tenants often prefer prebuilt offices, although they lease at a premium, because they save money on the logistics of outfitting the spaces. Asking rents at 1700 Broadway are in the high $60s per s/f for space on the building’s upper floors and in the low $50s for lower floors.
By prebuilding the 20th floor and part of 16th, Falk, Shimkin and Levine are aiming to create a model for the building’s other floors. The team said that it will be using a high standard for the installation, employing abundant glass in the units and expensive materials like marble. Shimkin and Levine said that the landlord would likely provide a work contribution for spaces that they lease on other floors, allowing those offices to be constructed to a tenant’s specifications.
By “building to suit,” as the customized process is known in the brokerage business, the landlord is able to save on the speculative expense of prebuilding floors while also giving larger tenants the chance to tailor a space to their particular operations or needs, an option that most tenants 10,000 s/f and larger prefer.