NEW YORK CITY-Ceremonial dirt was moved, indoors, as Hines and its ownership partners marked the start of construction on 7 Bryant Park Monday afternoon. Officially located at 1045 Ave. of the Americas, the 28-story office tower is slated for completion next year.
Hines’ equity partner on the 474,000-square-foot project, J.P. Morgan Asset Management, is financing construction despite the fact that the tower has yet to sign a single tenant. In going ahead with spec development, “Both companies are casting a tremendous vote of confidence in the future of the city,” Mayor Michael Bloomberg said in brief remarks during the groundbreaking ceremony.
Kevin Faxon, head of real estate—Americas for JPMAM, concurred, telling the audience, “We think it’s a smart risk to take, given the quality of the property.” Making that case to institutional investors may have required some heavy lifting: in a joking reference to Bloomberg, Faxon said, “I wish he’d been on our investment committee nine months ago.”
Tommy Craig, senior managing director and head of Hines’ New York office, pointed out that the project was conceived during the depths of the recession. Other office projects have been going vertical in recent years, Craig acknowledged, but all had their origins before the global credit crisis set in.
Against that backdrop, Faxon cited three primary reasons that JPMAM committed to becoming equity provider for 7 Bryant Park. One was “the quality of the partnership that we have” with Hines and limited partner Pacolet Milliken Enterprises, which owns the land on which the tower will be built.
Another factor, said Faxon, was the functionality and actual design of the property. Designed by Pei Cobb Freed & Partners, the tower emphasizes “21st century workplace standards,” Craig said. It has been pre-certified LEED Gold for new construction, he said.
The third reason was that time-honored real estate maxim: location, location, location, in this case across the street from Bryant Park. It was not always thus: three decades ago, recalled Bloomberg, the 9.6-acre park was “a symbol of everything that was wrong with New York City.” The efforts of the Bryant Park Restoration Corp., under the leadership of Dan Biederman, began to change that, and today the neighborhood surrounding the park stands as “one of the most desirable places to work anywhere in the world.”
With the onset of construction at 7 Bryant Park, Hines is continuing a development tradition that began with the Lipstick Building at 53d Street and Third Avenue in the early 1980s, said company president Jeff Hines. He expressed the hope that his firm would be following up in due course with more office and multifamily development here.
Office leasing on the project is being handled by CBRE, whose tri-state CEO, Mary Ann Tighe, was among the guests of honor Monday. The tower’s retail component is being marketed by RKF. On the construction side, team members include Turner Construction and Thornton Tomasetti.