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Weekly Market Report - December 1, 2021

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KPF expands at Tishman Speyer building after sweetener


For the second time in recent weeks, Tishman Speyer had a tenant renew at 11 West 42nd Street with a sweetener thrown into the mix. Architecture firm Kohn Pedersen Fox renewed its lease at the building, the New York Post reported. The company added 38,000 square feet on the seventh floor, bringing its presence in the building to 100,000 square feet. Luckily for KPF, the bills won’t come due on the expanded floor for some time, as the Post reported the firm is getting a rent-free year on the seventh floor. Rent for the total lease started in the low $60s per square foot. Tishman Speyer also recently scored a 75,000-square-foot lease from Turner Construction at The Spiral. The 13-year-lease involves the general contractor involved in building the project, set to open next year. KPF is known for its prolific architecture work across the world. It has been involved in several projects in New York City, including One Vanderbilt, 55 Hudson Yards and the CUNY Advanced Science Research Centers. ***

Turner Construction Relocating to The Spiral Tower It’s Helping Build

Turner Construction Company is relocating its global headquarters to 75,000 square feet at The Spiral, the 65-story tower it’s helping to build. The building’s general contractor took the entire third floor of Tishman Speyer’s property at 66 Hudson Boulevard in a 13-year lease, the New York Post first reported. Asking rents at the tower range from $110 per square foot at the base to $225 a foot at the top. Turner plans to relocate from its current offices at 375 Hudson Street to the tower in January 2023, after The Spiral’s expected completion in the second half of 2022, according to Tishman Speyer. Bjarke Ingels Group designed the 2.9 million-square-foot tower between West 34th and West 35th streets, which features staggered landscaped terraces as it rises. Peter Davoren, president and CEO of Turner said in a statement that the building’s sustainability was part of its draw. The 1,031-foot tall tower has previously signed deals with Pfizer, a biopharmaceutical company known for making one of the COVID-19 vaccines, to relocate its headquarters to 746,000 square feet and law firm Debevoise & Plimpton, which snagged 531,000 square feet. ***

Hybrid work is expected to be the new norm. Pulling it off successfully will come with challenges

Most companies have publicly committed to some version of a hybrid workplace in a post-pandemic world, after nearly two years of remote work that many employees have come to prefer over the office. A recent survey found, of 42 clients managing 350 million square feet of office space, 63% are changing up their design to keep up with new workplace needs. A majority reported they will use space-utilization data and mobility programs to learn more about how the office will be used and allow employees to work more easily outside of the office. A lot of occupiers are using tech and metrics to figure out how space is being used — and, likely, to inform how much real estate they'll need in the future. The Survey showed 79% of companies are tracking employee-badge swipes at entry points, 56% are using visual observation, 46% monitor office Wi-Fi logins and 26% are using sensors in rooms and desks. For companies that've already begun piloting design changes and hybrid workplace strategies, surveys done show employers that treat going back to the office like a light switch — an immediate flip back to how things were pre-pandemic — aren't being received well, Humphrey said. Sargent said companies are looking at ways to make spaces more inclusive. ***

City Council approves Gowanus rezoning

The City Council approved the controversial Gowanus rezoning Tuesday by a vote of 47 to 1, effectively getting the planned transformation of the Brooklyn neighborhood across the finish line with barely a month left to go in Mayor Bill de Blasio’s administration. The rezoning had been in the works for years but did not clear its final major obstacle until earlier this month, when local Councilman Brad Lander, the comptroller-elect, announced that he and the de Blasio administration had reached an agreement. The deal they struck includes $200 million in funding for a pair of public housing developments—Wyckoff Gardens and Gowanus Houses—along with a mandate that new construction stemming from the rezoning not further pollute the Gowanus Canal. It also establishes the Gowanus Rezoning Oversight Task Force, which is designed to ensure officials are keeping the commitments laid out in the agreement. The mayor heralded the vote, issuing a statement that said, “Rezoning Gowanus—and unlocking a high-opportunity, transit-rich neighborhood in the heart of Brooklyn for new generations of New Yorkers—is a transformative step toward building a recovery for all of us. “Thanks to years of hard work from city agencies, elected officials, advocates and Gowanus residents, we’re finally bringing this neighborhood the jobs, housing and open space it deserves.” The de Blasio administration estimates that the rezoning will bring about 8,000 new housing units to the neighborhood, more than 3,000 of which will be affordable.