The far west side neighborhood of Hudson Yards boasts new buildings, a city within Manhattan and beautiful views. Times Square offers noise, smelly streets and too many tourists. Some companies who lease their offices in Times Square want something new, so they’re leaving.
Times Square landlords, however, aren’t giving up on their properties. They’re adding amenities to attract new lease holders.
Ernst & Young, now called EY, is the latest company to sign a lease agreement, taking 600,000 square feet with Brookfield Property Partners at One Manhattan West. They will occupy 17 floors in the new building. Ric Clark, Senior Managing Partner and Chairman of Brookfield Property Partners, was excited about the new signing.
“Brookfield is thrilled that EY, one of the world’s most forward-thinking companies, chose Manhattan West as the place to build its future in New York,” he said. “Manhattan West will be Brookfield’s newest, most innovative and most transit-accessible place-making destination yet.”
Innovation and accessibility has helped Hudson Yards grow. There has been 8.4 million square feet of leases signed in the area, which includes the Manhattan West building on W. 31 St. Almost 7 million square feet of space is being vacated in the Midtown area according to Richard Persichetti of Cushman & Wakefield, commercial real estate brokers.
In 2015, Skadden, an international law firm, officially signed for space in One Manhattan West on 9. Ave and W. 33 St. They will be moving out of their 4 Times Square space which they were housed in for 17 years.
Many of these companies are looking at Hudson Yards and Manhattan West as places where they can see their company grow, but according to Persichetti Times Square can offer growth as well. It is a prospective place for businesses to grow because of new construction, buildings and designs that are appealing and companies don’t want to be stuck in the same routine.
Coach Inc., the retail company, was the first tenant of 10 Hudson Yards. They were housed in their old factory on W. 34 St., which is not too far from their current location. The CEO of Coach Victor Luis, told reporters last year that he was excited about the new “hub” of the city.
“Hudson Yards is being redeveloped into a community with a massive amount of commerce, residential, and cultural buildings all coming together in one location right here at the foot of the High Line where five, six million tourists from across the world come and enjoy New York,” he said.
The problem with Hudson Yards, however, is transportation. Right now there are only two ways to get to Hudson Yards via public transportation. The 7 train to 34 St.- Hudson Yards Station or the M 34 Select Bus Service. By contrast, Times Square has over twenty subway trains and buses. Transportation is one of the major components that is keeping Times Square attractive for some.
Times Square landlords know that the area isn’t the most appealing to people looking for office space right now. According to Evan Fiddle of the CBRE: United States Commercial Real Estate Services, imagine walking out of your office building to then be greeted by Elmo. He says, although Hudson Yards offers something fresh and news, Times Square offers value and some amenities, which includes the ease of transportation.
“Most of Times Square is not old construction,” said Fiddle. “There are new buildings and landlords are enticing business with better economics.”
Companies can save money in Times Square. The average rent in Times Square is between $78 and $87 per square foot. Meanwhile, at Hudson Yards, including Manhattan West, rents can average $90 per square foot. If Times Square continues to lower their prices, landlords will be able to lease.
One of the latest additions that will be coming to Times Square is Convene event space. This way if companies want to host events where they bring people from all over the world, they will have an event space right in Times Square and the options of hotels are endless.
EY wanted to expand their business to help their clients further. Richard M. Jeanneret, Vice Chair of the Northeast Region Managing Partner, EY said, “EY continues to grow and expand in serving our clients and our people across the Tri-State region. Today’s agreement with One Manhattan West, an inspiring, state-of-the-art environment in one of the best connected locations in the city, aligns with EY’s focus on innovation across all aspects of business.”
Even though Times Square seems to be losing right now, there is still hope. Other sectors, like the fast moving tech sector, could be next on the leasing block in Times Square. Landlords and brokers just need to sell the area as well as Hudson Yards landlords sell theirs.