SL Green Opens $3B Supertall One Vanderbilt With 30% Left To Lease
With spaced-out seating, temperature checks, and politicians and real estate executives in face masks, SL Green formally cut the ribbon on its signature office development, One Vanderbilt, Monday.
“One Vanderbilt is an example of transit-oriented development at its best, putting density where density belongs,” SL Green CEO Marc Holliday said at a ceremony to mark the occasion in the plaza outside the new building next to Grand Central Terminal.
“Today’s discerning businesses expect a much higher value proposition when choosing a headquarters location," Holliday said. "The space must attract the best talent, cater to customers and provide for flexible and efficient office space. One Vanderbilt answers this calling.”
He described the opening as a monumental day and the building process as an “extraordinary journey,” while giving a special shoutout to the 3,000 union workers involved in the construction and their “grit, skill ... and fortitude.”
“We never wavered, ignoring all the naysayers, believing in the power of this city and the importance of this vision,” Holliday said.
The $3B building spans 1.7M SF and is 1,400 tall, making it the fourth-tallest in New York and the tallest office building in Midtown, eclipsing 30 Hudson Yards and the Empire State Building by roughly 150 feet. It received its temporary certificate of occupancy last Friday, SL Green said.
As part of the development, SL Green spent $220M to build public spaces and transit infrastructure improvements, with a 14K SF plaza on Vanderbilt Avenue and two new street-level subway entrances. Holliday said the work will improve pedestrian circulation and ease congestion at the commuter hub.
Though it has multiple big-name tenants in the bag, the building is undoubtedly opening its doors at a challenging time for the office leasing world. Office deals have plummeted and this year is on track to reach its lowest volume in at least 20 years.
Alongside the stalled market, an air of uncertainty is hanging over the heads of office landlords. Many companies are opting to keep workers remote well into 2021, and in the long term, some firms have indicated an intention to move out of the city.
“There is no secret to any of us that these days, there is a little whiff of pessimism about New York's future,” MTA Chief Development Officer Janno Lieber said. "This project is proving the opposite is true."
Like many real estate companies, SL Green is backing its product. In his address, Holliday noted the company was one of the first in the city to go back to “100% work from office” as of June this year.
As one of the city’s biggest office landlords, the publicly traded real estate investment trust is one of multiple real estate operations that has reportedly been ringing the heads of companies in the last month, telling them that it is their duty to return to their desk or the city will slide into “decay.” Since Labor Day, JPMorgan and Goldman Sachs have begun telling many of their workers to go back to their desks.
One Vanderbilt is now almost 70% leased, and executives said the firm is in talks with two other companies to take space. Leasing would have been closer to 80% had it not been for the pandemic, SL Green officials said, but they now expect it to be closer to 72% leased by the end of 2020.
Tenants will be moving into the building the next few months, and SL Green will move its headquarters there from its current digs, across Grand Central at 420 Lexington Ave.
The Carlyle Group has taken more than 90K SF in a 15-year deal at One Vanderbilt, while law firm Greenberg Traurig is taking four floors. Law firm McDermott Will & Emery signed up for 106K SF, and TD Bank signed on as the anchor tenant several years ago and added its subsidiary TD Securities there with a 52K SF lease in 2018.
“Thank you for taking that early and important leap with us,” Holliday said to TD Bank at the ribbon-cutting.
Mayor Bill de Blasio arrived shortly before the event and described the building as a sign of the "rebirth" of New York City. In recent days, business leaders wrote an open letter to de Blasio, urging him to take action in order to quell anxiety over the future of the city. Holliday didn't sign the letter, but his office-owning CEO peers Scott Rechler of RXR, Steven Roth of Vornado, Jeff Blau of Related and Marty Burger of Silverstein did.
One Vanderbilt opened ahead of schedule and under budget, a feat Holliday said was particularly impressive considering the pandemic halted construction for two months.
“The winding down and the restarting of the project took a toll on everybody,” he said.
As well as office space, the building — the tallest in Midtown East — also has The Summit, an observation deck on the 59th floor. Famed French chef Daniel Boulud is opening an 11K SF restaurant called Le Pavillon on the second floor of the building.
In addressing the crowd, Manhattan Borough President Gale Brewer said she is not the "No. 1 development supporter," but described the opening as a huge celebration.
"There are many things to be thankful for today," Brewer said. "This is not just an office building. It's a development that heralds a new era in East Midtown."