The private equity firm is seeking 1.5 million square feet of office space, people familiar with the matter told Bloomberg. The company is weighing options that include a move to another building in the city or redeveloping a building to create the space. Blackstone isn’t shutting the door on 345 Park. Bloomberg reported the firm may expand its presence at the Rudin Management building, where it has operated for more than three decades. The building is slightly bigger than 1.8 million square feet, so expanding Blackstone’s presence to fit its ambitions would be difficult with other tenants in place.
Last year, Blackstone signed a deal to expand at the office by 80,000 square feet, bringing its total at 345 Park to 720,000 square feet. The firm also extended its lease for an additional year, through 2028. But Blackstone has threatened to move before. The Real Deal reported in 2020 the firm was considering options for a new headquarters as large as 1 million square feet. Blackstone reportedly asked a handful of landlords to submit proposals for potential headquarters in Midtown and the Far West Side.
Among the sites under consideration at the time was a supertall office tower on Park Avenue proposed by Rudin and Vornado Realty Trust. The developers floated the idea of developing separately owned properties into a 1,450-foot-tall, 1.68 million-square-foot tower at 350 Park Avenue.
With offices struggling, city and state officials are discussing revamping New York City zoning to allow for more housing, including in Midtown. After Sept. 11, government subsidies helped lure people to lower Manhattan, where officials had moved to convert unused office space into apartments even prior to the terrorist attacks. Planners, however, are skeptical that Midtown could or should look to housing to save the neighborhood Midtown’s survival is critical for Manhattan, which was home to nearly 11% of all office inventory in the U.S. last year.
Office availability in Manhattan, a measure of vacancy and space about to be vacated, reached a record-high 17.4% in February. Manhattan offices are currently less in demand than they were after the terrorist attacks of Sept. 11, when some wondered whether people would ever feel safe working in skyscrapers again. Manhattan was home to one of the world’s biggest and busiest office districts before the pandemic, with a daytime workforce larger than the entire population of Houston. An estimated 2.6 million people worked in the borough three years ago, 70% of whom commuted in from other parts of the city or its suburbs, according to the Department of City Planning.
Now, after two years of remote work, the formerly bustling Midtown office district feels more than a little hollowed out. A peek inside office towers reveals floors of vacant cubicles. Once-packed commuter trains arrive at Grand Central Terminal and New York Penn Station with ridership at less than half of pre-pandemic levels. New York City Mayor Eric Adams and New York Gov. Kathy Hochul have prodded employers to bring their workers back, but to little effect. Keycard swipes tracked by security company Kastle Systems show that Midtown offices barely cracked one-third of their pre-pandemic workforces in the first two weeks of March, despite falling Covid-19 infection rates.
Tishman Speyer has invested plenty of its own capital into proptech. Now the developer will help others, including its own investors, put money to work in the field. The firm said Thursday that it has rounded up $100 million for its first proptech fund, with major commitments from the National Pension Service of Korea — the world’s third largest public pension fund — and the Investment Management Corporation of Ontario, or IMCO. Other commitments came from domestic and international investors, including family offices and high-net-worth individuals, a spokesperson for Tishman Speyer said. The company is still raising capital for the fund and aims to hit the $150 million mark.
Demand from Tishman’s own investor base prompted its launch, said Jenny Wong, who leads its proptech platform. The Tishman Speyer Proptech Venture Fund will target early-stage companies with “proven technologies and disruptive business models designed to improve how residents, customers, brokers, investors, lenders, operators and owners interact with and experience real estate,” according to a release.