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Tower to be built on spec.

11 Times Square's developer and the head of its leasing team revealed last week that the roughly $1 billion office tower will be built on spec after all.

Amid the flurry of leasing activity that has pushed rents in Manhattan to record levels in recent months, numerous brokers and developers alike speculated that the 1 million s/ f 11 Times Square would likely draw a major tenant before its construction began.

Such a commitment would go a long way towards ameliorating the inherent risk of building a vacant office tower, which can thrust a developer into a financial bind if they are unable to find a tenant.

A number of prominent developers, including the Related Companies, Vornado, Brookfield Properties, and Boston Properties, have large development projects in Manhattan. But none yet have been willing to follow suit and break ground without tenant commitment. "I come from an institutional background and we study all of the fundamentals," said Steven J. Pozycki, the chairman and CEO of SJP Properties, which is developing 11 Times Square. "There really is a need for office space in this market."

Pozycki gave his comments at a Young Men and Women's Real Estate Association luncheon last week, what has become a popular forum for developers to introduce their latest projects to the brokerage community.

"We're after a 300,000-500,000 square footer," Steve Siegel, CB Richard Ellis's chairman of global brokerage, announced to the crowd. "SJP is user friendly, they know how to sit in a room ... and get deals done."

Siegel is heading up the leasing team for 11 Time Square and indicated he has explored one or more potentially large leases with tenants from the entertainment industry. The discussions had not yet reached the tenor of a more serious negotiation for the space however, meaning the building will be tenantless when it breaks ground in the coming weeks.

An architect from the FX Fowle team that designed the building was on hand to trumpet its virtues, including a dramatic cantilevered face that will offer floor-to-ceiling windows.

Sitting on Eighth Avenue and occupying the block between 41st and 42nd Street, the building will offer L shaped floorplates that, because of the building's overhanging face, will actually be larger on the tower floors--around 40,000 s/f.

"Steve and I went around and toured many of the buildings in the area for comparison," said Dan Kaplan, an architect at FX Fowle. "One of the things that we noticed was that many of the buildings in the Time Square district have undersized lobbies. In this building we designed a three-story lobby, the kind of larger lobby that corporate tenants find attractive."

The building is aiming for a silver LEED certification with lighting and ventilation systems that are energy efficient and plumbing that recycles rainwater.

The talk of green design drew interest from Helena Durst of the Durst Organization, whose office tower at One Bryant Park two blocks east is aiming to achieve an elite LEED platinum certification when it finishes construction.

"Will the building have recycling chutes?" Durst asked Kaplan.

The answer was no, but Durst said afterwards that such chutes can also be problematic.

The tubes allow tenants to drop recyclable waste like paper into a ground or basement floor receptacle, saving the energy that a freight elevator would use to pick up the waste floor by floor.

At 4 Times Square however, the Durst Organization's environmentally friendly tower that abuts One Bryant Park, Durst said the chutes were damaged because they were used to dispose of wet waste.

"Today we only use the chutes for paper," Durst said. One Bryant Park's chutes will only handle paper as well which Durst said was "the majority of office waste."

"It's great when you see developers like SJP make the effort to be part of the movement," she said.

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Author:Geiger, Daniel
Publication:Real Estate Weekly
Date:Apr 18, 2007
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