Times Square Identity Problem Is Scaring Off Its Clients
It came from seedy beginnings. Is Times Square going back to its roots?
From porn to Pluto, Disney to “desnudas”, despite the best intentions to rid itself from its sordid past, you can almost hear Times Square echoing Michael Corleone’s famous line from the Godfather Part III: “Just as I try to get out, they pull me back in.” The ramifications are being felt high above the street as corporations, appalled by an apparent reversion to the days of yore are leaving and heading to more refined climes.
Most notably, magazine publisher Conde Naste moved out of its former HQ’s at 4 Times Square to One World Trade Center in 2014. Since then law firms Skadden, Arps, Meagher & Flom (moving to Hudson Yards) and White & Case have also left. Now comes news that accounting firm EY, formerly Ernst & Young plans to vacate a portion of its longtime 5 Times Square home (170,000 square feet. Their lease ends in 2022) and shift to the New Jersey waterfront. Word has it that the London based firm is in talks to take up space at 121 River St., an office building in Hoboken.
Of course, it doesn’t mean that Times Square is about to go all 70’s desperado with Taxi Driver’s Travis Bickle and Midnight Cowboy’s Joe Buck languidly passing days in its seedy movie theaters. But it has reverted to a bit of a tourist trap with skyscraper-staring camera-wearing folks from everywhere but here. Today’s numbers are staggering. 66.4 million riders entered the 42nd St subway station in 2015 making it the #1 in the MTA’s subway ridership ranking stop in New York. It currently costs $2.5 million/month to advertise on an eight-story-tall digital billboard wrapped around the Marriott Marquis Hotel on Broadway. Even during the recession Times Square occupancy rates stayed above eighty percent, which would explain why Developer Extell spent $46 M assembling the site for a new 445 room Hard Rock Cafe in 2015. So its drug-fueled pimp-limping past looks in no danger of returning.
There are 400,000 people passing through Times Square’s pedestrian plaza on any given day, meaning a boon for street level businesses with 107 police officers a day on duty, meaning it’s one of the best monitored junctions in New York. According to many publications, the pedestrianizing of the area and in particular the sight of teenage boys posing next to bare breasted women has left corporate America queasy and their landlords and brokers looking elsewhere.
The New York Times, reported that the shift away from Times Squares isn’t simply down to ethics. Finance is the main motivator.
“The landlords got too piggy, and the tenants are starting to flee,” said Robert Bielsky, the chairman of Manhattan Commercial Realty, a tenant-focused commercial brokerage.
Another reason comes down to simply being hip. Times Square isn’t it. Even corporate America wants to sit at the cool table with tech start-ups and fashionable businesses. The new development at Hudson Yards with its upscale stores, landscaped gardens and eclectic food court has many notable businesses, such as the Time Warner Company, all decamping to the massive new development.
Times Square’s predicament is perhaps summed up by CBRE‘s global brokerage chairman Stephen B. Siegel on CUNY TV’s “Stoler Report” last week. “Times Square is going to have an issue,” he said, “…the environment is. . . becoming a little honky tonky, [with] Cookie Monster and these other characters.
“There are tenants of mine who have said, ‘I don’t want to look there,’” Siegel said. “Times Square is seedier again — not the way it used to be [with violent crime], but with street characters, crowds and lighting.”
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