[sparkling]

Meatpacking District’s Next Act Includes an Influx of Office Space and More


860 Washington should be ready for occupancy by the end of the year. Credit Chang W. Lee/The New York Times

MARCH 31, 2015
RONDA KAYSEN

The meatpacking district in Manhattan is about to grow even busier, as office towers and Samsung move in and add a layer of transformation to an area that once reeked of slaughterhouses and literally vibrated with railway commerce.

New arrivals include two commercial structures — a 10-story glassy tower and a six-story Samsung flagship building — across from the Standard Hotel at Washington and West 13th Streets.

On May 1, the Whitney Museum of American Art’s new building, designed by Renzo Piano, will open along the High Line, drawing even more pedestrian and tourist traffic to the area.

And construction could begin next year on Pier 55, a $130 million park and performance space planned on the Hudson River between West 14th and Little West 12th Streets.

“There are really few neighborhoods who’ve had as many next acts as the meatpacking district,” said Lauren Danziger, executive director of the Meatpacking District Improvement Association. “We’re absolutely on the cusp of something really special.”

By the end of this year, tenants could begin moving into 860 Washington Street, the 10-story tower, which was developed by Property Group Partners in partnership with Romanoff Equities. Designed by James Carpenter, the building will have two floors of retailing, with the second aligned with the High Line walkway so shoppers can see the park from within. The eight higher floors will be leased for office space.

The tower replaces a squat, two-story meat-cooler facility that at one point opened directly onto the High Line, receiving deliveries from the refrigerated train cars that traveled along the elevated platform. Diagonally across from the tower is 837 Washington Street, a new trapezoidal brick, glass and steel structure built atop a historic brick facade. Last summer, Samsung leased the entire six-story building, with plans to showcase its mobile products and house its brand marketing team there.

Critics have worried that the district’s lingering historic character, reflected in its Belgian-block streets and converted meat coolers, will be marred by a deepening invasion of office workers and glassy commercial buildings. (The district’s association estimates that 600,000 square feet of commercial space will be added within three to five years, including a hotel, retail and office space and an expansion of Chelsea Market.)

“This next stage of its evolution to a high-end office district I fear will make the meatpacking district feel even more indistinguishable from Midtown,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, which has been critical of the size, scale and design of the 10-story tower at 860 Washington Street. “There is no denying that the district has traveled a long way from its workingman roots, and there is no turning the clock back.”

Retail changes are also altering the area, with neighborhood institutions continuing to disappear. The Rockfeld Group does not plan to renew the lease of the Gaslight Lounge, a neighborhood fixture with heavy red drapes and antique furniture at 400 West 14th Street, when it expires in 18 months. Instead, Rockfeld hopes to market the ground floor of the five-story landmark building to a high-end retail tenant.

“Kind of like what happened in SoHo, the first guys to come in are the restaurants and the bars, and then the restaurants and bars get priced out,” said Steven Feldman, a managing partner at the Rockfeld Group, a family-held company that has owned the building for 85 years.

Last fall, Restoration Hardware signed a 15-year lease for 9-19 Ninth Avenue, a building that previously housed Keith McNally’s French bistro Pastis.

The developers of 860 Washington are seeking top prices for leasing, $600 a square foot for ground-floor retail space and $300 a square foot for the second floor, a premium in the neighborhood. The average asking price for ground-floor retail space is about $340 a square foot, according to Karen Bellantoni, an executive vice president at the brokerage company RKF.

People familiar with the market are skeptical that retail space could fetch prices approaching those in well-trafficked neighborhoods like SoHo. “I think the retail is inflated,” said Jeffrey Nissani, an associate broker at Marcus & Millichap. “The thing in the meatpacking district is the foot traffic is not that high, other than at night.”

While the district is certainly a popular weekend and evening destination, some developers are banking on an increase in daytime visitors.

For example, now that the Whitney Museum’s new home will be twice the size of its most recent one, the Marcel Breuer building uptown on Madison Avenue, it is expected to draw far more visitors than the 350,000 a year who viewed its exhibits on the Upper East Side.

Aside from tourists and art devotees, office workers — including an expected 400 at 860 Washington — provide a growing presence.

The neighborhood already has a sizable number of office workers, particularly in the technology industry. The Apple retail store at 14th Street and Ninth Avenue has been a neighborhood anchor since 2007.

Chelsea Market, which spans Ninth and 10th Avenues between 15th and 16th Streets, is home to several technology companies — including Google, which expanded its offices there last year.

Google’s New York City headquarters are nearby, at 111 Eighth Avenue, and it also has offices at 85 10th Avenue. And Palentir, a computer software company, has offices on Little West 12th Street.

The developers of 860 Washington hope to draw companies more typically associated with Midtown, including finance and law firms.

“The neighborhood has become a magnet for the financial tenants,” said Stuart Romanoff, a vice chairman at Cushman & Wakefield, which is marketing the development. Mr. Romanoff is a member of the Romanoff family, which has owned the site for decades.

“Tenants today want the ability to attract employees, they want lifestyle, they want entertainment, they want the restaurants, they want the hospitality and they want the park,” Mr. Romanoff said. “The unique thing about the meatpacking district is it has all those elements converging.”

With vacancy rates for prime office space at 3.4 percent in the district in February, according to the real estate consulting firm Jones Lang LaSalle, tenants looking for space in the district have few options. With floor-to-ceiling windows, 860 Washington will offer tenants unobstructed Hudson River and city views. The fourth floor has a 1,600-square-foot private terrace.

“It’s going to have a huge impact on the market,” said Steven Rotter, a managing director at Jones Lang LaSalle. “A lot more companies are going to see that this is a great place to work now.”