Office Market Booming in New York

By Veronica Grecu, Associate Editor

Boston Properties Inc. will resume construction of a 39-story office building in Midtown Manhattan. The company recently signed a 15-year lease for 180,000 square feet of office space with law firm Morrison & Foerster LLP as the first tenant of the planned skyscraper. Mark Eldstein, who negotiated the lease with the Boston-based REIT, said in a statement that Morrison & Foerster was eager to find an environmentally friendly building

The construction began in 2007 but was suspended in February 2009 after law firm Proskauer Rose LLP, the tower’s then-prospective tenant, dropped its plans to lease office space in the building. Boston Properties estimates that the construction will restart by fall 2011, and the total cost upon completion will be approximately $1.05 billion. The first tenants will be able to move into this 1 million-square-foot glass tower by spring 2014. In a statement released last week by Boston Properties, Mortimer Zuckerman, the company’s chairman and CEO, said that after completion, the tower at 250 West 55th Street will stand out as one of the elite office buildings in Manhattan.

The resumption of construction on this project indicates that New York’s office market is improving. Another testimony to the city’s economic revitalization is the recent purchase by The Zar Group, formerly known as Zar City Properties, who recently bought a 42-story office tower at the corner of 41st Street and Broadway for $204 million. Avi Zuckerman, the company’s director of acquisitions, declared in Crain’s New York that the 400,200-square-foot building has a 14 percent vacancy rate and new tenants are expected to be attracted by its full-floor office spaces. The group’s CEO, Bobby Zar, added that long-term plans for the office tower include converting it into residential housing.