Amazon Doubles Down on NYC’s Hudson Yards
The e-commerce titan's lease underscores Manhattan's rise as a tech hub as well as the emerging appeal of the Far West Side neighborhood.
It may have seemed that Amazon’s romance with New York City ended in February, when the e-commerce firm walked away from plans to build a huge corporate headquarters campus in Queens. But the company’s latest lease in the West Side of Manhattan suggests that the lure of the emerging Hudson Yards neighborhood is too powerful for the tech titan to resist.
Slated to open in 2021, the new 335,408-square-foot office in SL Green’s 410 Tenth Avenue will house more than 1,500 employees from Amazon’s consumer and advertising teams, according to a statement by the firm. New York City’s largest office landlord SL Green is redeveloping the building, formerly known as 460 W. 34th St., which it purchased this year.
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The loft property in Manhattan’s Far West Side is located across the street from Brookfield Properties’ 5 Manhattan West, where Amazon has already leased 360,000 square feet of space, and directly to the east of the $16 billion Hudson Yards mixed-use development, where Facebook recently leased 1.5 million square feet across three towers.
“Hudson Yards is the largest concentration of new Class A buildings in the country, so it is natural for these best-in-class tenants, with valuations closing in on a trillion dollars, to want the best space possible,” Eric Anton, associate broker at Marcus & Millichap, noted to Commercial Property Executive.
Seattle-based Amazon’s new lease is poised to reinforce Manhattan’s rise as a technology hub. Google rounds out the trio of tech behemoths that are expanding in the West Side, with an upcoming $1 billion, 1.7 million-square-foot campus in Hudson Square further to the south.
Loft building nabs new anchor tenant
SL Green closed on the $409.9 million acquisition of 410 Tenth Avenue in May, shortly after signing up First Republic Bank to occupy 211,521 square feet in the 20-story vintage building. The REIT is undertaking a comprehensive overhaul of the 638,000-square-foot property once known as the Master Printers Building, including moving the lobby entrance from the 34th Street side to the 33rd Street and creating a new glass box lobby along with new 9-foot-high industrial-style windows.
Other improvements will include façade re-coloring, new elevators, and the addition of a 5,000-square-foot roof deck and a 3,000-square-foot tenant lounge. The building features 33,900-square-foot floor plates and office floors have 13.5-foot slab heights with mushroom-capped columns. The property is currently 96.2 percent leased, according to a statement by SL Green.
Terms of Amazon’s lease were not disclosed, but Commercial Observer has reported that asking rents in the building hover around $90 per square foot. According to an account in the Wall Street Journal, Amazon will move into the building in the third quarter of 2021 without any special tax incentives.
JLL’s Derek Trulson, Bill Peters and Josh Stuart represented the tenant in the deal, while NKF’s Brian Waterman, Scott Klau, Brent Ozarowski and Erik Harris represented the landlord.
West Side Rising
The lease commitment represents another vote of confidence in the Hudson Yards neighborhood, which has lured firms in the tech, legal, financial and consulting sectors with its large, new buildings, efficient floor plates and trendy surroundings.
“Everybody wants outdoor spaces. They want transit accessibility,” said Jonathan Wasserstrum, founder and CEO of commercial real estate technology firm SquareFoot. “For whatever reason, Midtown still isn’t cool yet. So if a company’s trying to recruit Millennials, you’d prefer to be in Hudson Yards rather than Midtown,” he added.
Along the West Side waterfront, “the most intense and beautiful and creative space is from Hudson Yards down to Hudson Square,” noted Anton.
The news comes after Amazon scrapped plans in February to develop a 4 million-square-foot “HQ2” campus in Long Island City, a section of Queens across the East River from Manhattan. Amazon faced a volley of criticism for negotiating hefty state and local tax breaks and incentives for the proposed project, which the company pledged would bring 25,000 jobs to the neighborhood.
“Amazon is coming to New York, just as they always planned,” said Senate Deputy Leader Michael Gianaris, who helped lead the charge against the H2Q deal, in a prepared statement. “Fortunately, we dodged a $3 billion bullet by not agreeing to their subsidy shakedown earlier this year.”