[NYguy]

http://www.nytimes.com/2013/10/14/ny...ttan.html?_r=0

Sale of a Landmark Building Reflects the Changing Needs of Lower Manhattan





By CHARLES V BAGLI
October 13, 2013

.....The bidders — New York real estate operators, Asian investors and opportunistic developers — based their offers on converting the acres of office space at 1 Chase Manhattan Plaza into condominiums, high-end rental apartments, a luxury hotel or a retail mall and, perhaps, even keeping it as an office building.

Some urban planners, civic leaders and real estate executives say that turning this monument to financial capital into plush apartments or a chic hotel would indicate that the city’s second-largest business district, after Midtown, was losing cachet. Chase moved its headquarters to 270 Park Avenue in 1996.

“Rockefeller’s decision to build Chase Manhattan Plaza sustained Lower Manhattan as an office market,” said Eric Deutsch, a former president of the Downtown Alliance, a business group founded by Mr. Rockefeller in 1958. “Today, it’s a struggle to sustain office buildings in the face of the unrelenting demand for residential properties.”

.....The amount of office space downtown has fallen to 83 million square feet, from a high of 95 million square feet, as former office towers like the Woolworth Building are converted to expensive condominiums. Large blocks of vacant space are available at Brookfield Place, and with three office towers under construction at the World Trade Center, there is a lot of new space in need of tenants. And once JPMorgan Chase departs, the building will be 70 percent vacant.

.....The notion of selling 1 Chase Manhattan Plaza came up this year, after the developer Steve Witkoff made an unsolicited $650 million offer, according to several bidders. Mr. Witkoff was considering converting the building to a mix of uses: expanded retail at the base, a boutique hotel in the middle and condominiums at the top.

The bank decided to put the building on the auction block and hired the architects at Skidmore, Owings & Merrill to assess the viability of converting the office space. (Gordon Bunshaft of Skidmore designed the tower, which opened in 1961.)

The auction initially attracted about a dozen bidders, including Mr. Witkoff; the developer Harry Macklowe; the investors Joseph Chetrit and David Bistricer; Tishman Speyer Properties; Boston Properties, which owns the G.M. Building in Midtown; Starwood Capital; L & L Holding; R X R Realty; and at least two wealthy Asian investment funds.

Real estate executives said the bidders who were considering hotel and residential uses, which might generate the most profits, had to weigh the cost of installing operable windows and the uncertainty of getting approvals from city agencies like the Landmarks Preservation Commission.