Brookfield Property Partners said it will start building its 1 Manhattan West office tower, after signing a lease with the law firm Skadden, Arps, Slate, Meagher & Flom LLP for about a quarter of the skyscraper.
The agreement, announced Tuesday in a statement by New York-based Brookfield, jump-starts office construction at the seven-million-square-foot Manhattan West project, part of an effort to draw the Midtown business district west toward toward the Hudson River.
It's another step in the plan to remake the once-industrial Hudson Yards area into a neighbourhood for housing and commerce, with office tenants including Coach Inc. and Time Warner Inc. and stores such as the city's first Neiman Marcus.
The Skadden law firm agreed to a 20-year lease for 550,000 square feet on floors 28 to 43 of the 67-storey tower, a Brookfield news release said. The building will be the first of two planned commercial buildings to be built at Brookfield's five-acre development, Manhattan West.
Manhattan West will be an "entirely new neighbourhood" that will "redefine the west midtown skyline," Dennis Friedrich, chief executive officer of Brookfield's office division, said in the statement. "When this building opens in 2019, it will be home to Skadden and other exceptional companies from New York and around the world."
Wells Fargo Bank, N.A., Deutsche Bank AG New York Branch, The Bank of New York Mellon, and The Toronto-Dominion Bank are co-leading $1.25-billion (U.S.) in construction financing for the towe, Brookfield said. Brookfield is investing $850-million in the project, bringing the total cost to $2.1-billion.
When completed, the $4.5 billion Manhattan West development will include two new class A office towers, retail, rooftop gardens, restaurants and cafes and a luxury residential building. A two-acre public park will transect the site.
Construction began in January on Brookfield's 62-story, 844-unit luxury residential tower in Manhattan West at 435 West 31st Street between Ninth and Dyer Avenues, Brookfield said.
This marks the second time in less than two decades that Skadden will be a pioneering tenant in a new Manhattan office neighborhood. In the late 1990s, the firm moved into 4 Times Square, becoming an anchor tenant along with magazine publisher Conde Nast. Skadden currently occupies about 826,000 square feet in that building, under a lease that expires in 2020, according to data complied by Bloomberg.
The developer, Durst Organization, has no office commitments in the tower beyond that year. Conde Nast relocated its headquarters to 1 World Trade Center in lower Manhattan.