Midtown’s One Vanderbilt Set To be One Of Manhattan’s Most Profitable Towers
With a lucrative retail bank, observation deck, and world class restaurant, One Vanderbilt seems set to justify its $3.14 billion price tag.
If you’ve ever wondered what kind of revenue a office tower in Midtown Manhattan will generate, the numbers for One Vanderbilt may raise an eyebrow or two. Set to become the tallest office tower in Midtown and said to cost a total of $3.14 billion, the Grand Central area tower is expected to generate almost $200 million per year, according to The Real Deal.
SL Green, the largest commercial landlord in NYC, expects to throw off a net profit after expenses of $198 million, based on the assumption that the tower is leased out at an average of $155 per square foot. If it manages to get its numbers, it would make the 1.7-million 1,401-foot-tall tower one of New York’s most profitable office buildings, despite being shorter than some of the city’s other noted towers. The building also contains 14,000 square feet of public plaza between the tower and Grand Central Terminal,
One of the first things any owner of these kind of skyscrapers has to attract and publicize is an anchor tenant. In this case, the anchor tenant is TD Bank , occupying 200,000 square feet. It will also utilize ground level space as a retail bank, although the building will not be completely finished until 2020. Also confirmed for the second floor of the building is an 11,000 square feet world class restaurant, with a massive 105 feet ceiling height. The entrance will be on the corner of Vanderbilt Avenue and 42nd Street. SL Green managing director Brett Herschenfeld told the NY Post, “We are in the latter stages of selecting… one of the top restaurateurs in the world.”
A big source of revenue for the project is the building’s lucrative Observation Deck. Its owner expects to generate an annual net operating income of $42.2 million. It will compare with the Empire State Building, owned by the Empire State Realty Trust. Its Observation Deck, perhaps the most famous in the city, brought in $112.17 million in gross income in 2015, minus $29.83 million in observatory expenses. Downtown, One World Trade Center which is twice the size of One Vanderbilt, is expected to generate about the same number — $196 million, with its observation deck generating $53 million of that.
SL Green recently sold a stake in its prize tower to the National Pension Service of Korea which has around $475 billion in assets. They are taking a 27.6 percent stake with Hines, a development manager on the project, taking a 1.4 percent interest, The deal will effectively pump $525 million in equity into project reported The Real Deal. Big numbers, big building.
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