Jones Lang LaSalle Inc. sees big prospects blossoming in Lower Manhattan, and the commercial real estate services firm has just assigned managing director John Wheeler, a longtime JLL employee with nearly three decades of experience, the task of spearheading the office’s increasing penetration of the submarket.
“We see as a firm, and I see as an individual, tremendous opportunity in this marketplace,” Wheeler told Commercial Property Executive. “It was an ideal time for me to increase our market share, and there’s no better time to do this.”
The expansion of his role as managing director essentially constitutes the firm’s effort to formalize its treatment of the Lower Manhattan office brokerage operations as a distinct and self-sustaining marketplace. As head of the office, Wheeler will utilize his cultivated knowledge of downtown and his well-honed real estate skills in everything from brokerage activities to property management, to capitalize on the area’s renaissance. Major achievements under his belt include his assistance in Wells Fargo’s disposition of more than 1.1 million square feet of commercial space and the orchestration of the New York City Housing Authority’s 20-year lease of the entire 550,000-square-foot office building at 180 Water Street.
It’s a new day in Lower Manhattan, which is the fourth-largest office market in the country, and, as Peter Riguardi, president of Jones Lang LaSalle’s New York region, noted, Wheeler is one of the few players well qualified to take the firm’s local office to a new level. And the assignment will require every ounce of Wheeler’s expertise because while the market has opportunities, he told CPE, it also has issues to overcome.
“First and foremost is the misconception of the market by people who have not been active down here,” he explained. “They’re holding onto notions and opinions of the market that no longer match the dynamic community it has become. People who may have started their careers in Lower Manhattan and long ago migrated to Midtown often still hold the notion of a place that goes dark at 6 o’clock at night. And yet with the dynamic growth of the residential communities down here, we’ve seen the neighborhood truly become a 24-hour neighborhood.”
And then, he added, is the false impression that Lower Manhattan’s office offerings are predominantly pre-war buildings that do not provide the amenities and accommodations found at new properties. “By the time 1 and 4 World Trade Center are completed, nearly 20 percent of our supply in Lower Manhattan will be space constructed post-2000,” he said. “Coincidentally, over the last 10 years, we’ve had 10 million square feet of older office buildings taken out of the office supply and converted to residential units. So the overall average age of our stock is now younger than Midtown Manhattan.”
The final piece of the educational puzzle that the Lower Manhattan office plans to put together for prospective users is enlightenment regarding what the market has to offer in the post-9/11 environment. “You can see 1 and 4 World Trade Center, you can see the PATH transit hub, you can see the Fulton transit hub,” he said. “These are all areas that actually will have the best office product and the best transit hubs in Manhattan and in the region.”
Indeed, the area has reeled in a few big fish that will surely help lure more users. Condé Nast committed to 1 million square feet at 1 WTC in 2011, and law firm Wilmer Cutler Pickering staked a claim to roughly 336,000 square feet at 7 WTC at the beginning of this year, pushing the 1.7 million-square-foot building’s lease level up to100 percent. “There’s a reason that over the last five years, over 20 percent of the leasing activity in Lower Manhattan has come from tenants migrating to Lower Manhattan and I expect that trend to increase,” Wheeler said.
Wheeler is prepping the office for what will hopefully be an onslaught of activity. “We’ve always had a presence in Lower Manhattan,” he said, “and we’ve been very successful with our blue-chip clientele, but we’re not satisfied with our market share. So as part of our strategic approach to the market we wanted more people dedicated exclusively to the Lower Manhattan marketplace.”