[NYguy]

https://www.crainsnewyork.com/real-e...mmitted-tenant

Brookfield to build West Side tower without committed tenant

DANIEL GEIGER
January 28, 2019

Brookfield Properties is planning a $2 billion office tower in Hudson Yards without the requisite lease commitment from an office tenant.

The $7.2 billion public company and its financial partner in the development, the Qatari Investment Authority, are moving forward with 2 Manhattan West, a 62-story, 1.95 million square-foot glass tower designed by the architecture firm SOM, on speculation. The developer is betting that tenants will lease up a substantial portion—or all—of the spire before it is complete in 2022.

Brookfield Properties, which recently became the largest commercial landlord in the city after a series of major acquisitions, has had success filling most of 1 Manhattan West, an adjacent 67-story, 2.1 million square-foot sister tower it began building in 2015 and that is nearing completion. The company started development of that building only after it secured a more than 600,000 square-foot lease commitment from the law firm Skadden Arps, Slate, Meagher & Flom LLP.

"We know firsthand that space in 2 Manhattan West is highly sought-after, and we're moving ahead," said Ben Brown, an executive vice president at Brookfield Properties who manages the company's New York and Boston operations. "Based on our success leasing office space at Manhattan West to date combined with the high level of interest we are seeing from leading companies seeking new space, we are excited to bring 2 Manhattan West on-line as quickly as possible."

One Manhattan West has been a draw for office tenants. In addition to Skadden, the accounting firm EY signed on for 640,000 square feet in 2017. The National Hockey League and Accenture, a management consulting firm, also took 175,000 square feet and 250,000 square feet respectively in the tower. And at 5 Manhattan West, JP Morgan Chase and Amazon leased 430,000 square feet and 360,000 square feet, respectively, and Whole Foods plans to open a grocery store in the building's base.

"It makes perfect sense for Brookfield to build this tower," said Mary Ann Tighe, CEO of CBRE's New York office. "In the larger Brookfield universe this is not going to have a meaningful impact on its cash. And the office market has made it clear that it wants new construction."

Adding to its financial heft at Manhattan West, Brookfield's partner in the project is QIA, one of the world's largest investment funds, with more than $300 billion in assets under management.

Two Manhattan West may face competition from several other state-of-the-art office towers that are rising or are planned in the Hudson Yards neighborhood. A partnership between Boston Properties and the Moinian Group, for instance, are planning a large office spire at 3 Hudson Blvd. Tishman Speyer has hundreds of thousands of square feet of available space at the three million square-foot tower called the Spiral that it is raising nearby. The Related Companies meanwhile is building the nearly 1,000 foot tall skyscraper 50 Hudson Yards that has a large block of available space.