NEW YORK CITY—When it comes to attracting large tenants, thetime-honored real estate maxim has been updated, CBRE EVP PaulMyers said at RealShare New York last week. “It used to belocation, location, location,” Myers told the more than 300industry professionals who assembled for this year's conference.“Now it's location, quality, quality.”

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Specifically, Myers was commenting on Related Oxford's HudsonYards mega-project and what Paul Travis, managing partner atWashington Square Partners, called the project's “remarkable”ability to attract major tenants in short order. “The tenancy inManhattan has been shifting west,” said Myers. “Hudson Yards is acontinuation of that trend.”

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The Hudson Yards zoning district in particular, and the Far WestSide in general, “is going to be the center of Manhattan 20 yearsfrom now,” predicted Robert Knakal, chairman of Massey KnakalRealty Services. He noted that current prices on developmentparcels in the district bear that out.

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Another Knakal prediction was nearer-term: “We will see morebuildings sell in New York City this year than ever before. “ Heattributed this to what economists refer to as “a positive feedbackloop.” Namely, “Values are very, very high, and so people who ownthese buildings find these prices compelling and put them on themarket.” The buyers run the gamut: “local high-net-worthindividuals, New York families, institutions, first-time buyersfrom around the country, first-time buyers from around theglobe.”

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More broadly, Knakal thinks the next hot neighborhoods willcenter around transit hubs, wherever in the city they may be. Thatof course evokes the example of Lower Manhattan, which is in themidst of an office, residential and retail rebirth that fewpredicted after 9/11.

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With all of the development going on Downtown or on the Far WestSide, though, it “barely moves the needle” in terms of adding tooffice supply, said Simon Wasserberger, managing director atL&L Holding Co. Pointed out Seth Pinsky, EVP with RXRRealty, “The market is even tighter than raw statistics wouldindicate on the commercial side, especially when you look at modernoffice space, because so little development has taken place in thepast 20-plus years. If you look, we have almost lost as much spacein New York City as we've created,” due both to the destruction on9/11 and conversions of older office stock to residential and hoteluses. E

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ven with all of the residential conversion that has taken place,though, panelists throughout the half-day conference cited a needfor more workforce housing, although they didn't necessarily agreewith the de Blasio administration's ways of encouraging suchdevelopment. And they noted that formerly affordable neighborhoods,in Brooklyn and elsewhere, have become anything but.

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That effect isn't limited to residential, however. In a sign ofthe times, Myers reported that he has seen tech tenants relocatingfrom Midtown South to Midtown East, having been priced out of themore southerly neighborhood. They've also been heading to the PennPlaza submarket, and slightly to the north and east of PennStation, “I think Times Square South will be the next neighborhoodto benefit from this spillover effect.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.