SL Green Signs Anchor Tenant Near Hudson Yards

The REIT scored its first success with a 92-year-old office building that it’s under contract to buy. First Republic Bank will occupy some 211,000 square feet at the property.
460 W. 34th St. Rendering courtesy of SL Green

New York City’s biggest office landlord has already found an anchor tenant for a 92-year-old Manhattan building that it’s still in the process of buying. SL Green Realty has lured First Republic Bank to occupy 211,521 square feet at 460 W. 34th St., a Class A office building in the Hudson Yards neighborhood.

Under the terms of the 15-year lease, First Republic will open two retail bank branches in a portion of the ground and mezzanine floors and will take up the entire second through sixth floors for corporate offices. The bank branches will be located at the two corners of the property that adjoin 10th Avenue.

SL Green agreed to buy a majority stake in the 20-story building valued at $440 million last December and plans to embark on a comprehensive redevelopment program upon the closing of the deal in May. Built in 1927, the 638,000-square-foot property in Manhattan’s Far West Side is located directly across from Hudson Yards, a $16 billion mixed-use neighborhood developed by Related Cos. and Oxford Properties Group. The first phase of the 28-acre development opened in March.

Betting on a rising neighborhood

After taking over the office building, SL Green will move the lobby entrance from the 34th Street side of the building to 33rd Street, build a glass box lobby with 9-foot-high windows and add new elevators and double-height storefronts. Other modifications to the asset formerly known as the Master Printers Building will include a new roof deck and lounge.

The repositioning effort is intended to raise the profile of the building within the West Side neighborhood and woo tenants that are looking for creatively designed offices with high-quality amenities. SL Green’s investment—like First Republic’s decision to move in—is also a bet on the emerging Hudson Yards area.

“Everybody wants a piece of (Hudson Yards) because it’s exciting, it’s new, it’s the biggest privately financed development project in the country,” said Eric Anton, an associate broker at Marcus & Millichap, in a conversation with Commercial Property Executive“It seems to be doing extremely well, both on the office leasing side and the residential condo sales side, and there is buzz regarding the hotel component, as well as the retail space, which just opened,” he added.

Hudson Yards makes a splash

Anton sees the mega-project as having extensive ripple effects on the surrounding real estate market. “Many of these buildings in the Garment Center will be upgraded and these properties will service the big tenants on the Far West Side,” he noted. “Mid-block buildings, which are 100,000-square-foot in the 30s, between say Sixth and Ninth, will be upgraded and the companies that need to be near the large corporate tenants—like BlackRock and L’Oréal and Coach and all the big banks and law firms—will locate there. And I think that’s going to happen very quickly,” he said. “So I think it’s not just the immediate one-block radius or two block-radius, it’s really much larger.”

The JLL team of Frank Doyle, David Kleiner, Betsy Buckley and Ellen Grace represented First Republic Bank. Newmark Knight Frank’s Brian Waterman, Scott Klau and Eric Harris acted on behalf of the landlord.