Developer SL Green broke ground Tuesday on the $3 billion, 1,401-foot-tall One Vanderbilt mixed-use office tower in Manhattan, the company announced in a press release, marking the start of construction on what will be the second-tallest high-rise in New York City.
When complete in 2020, the 58-story building will offer up 1.7 million square feet of office space.
- As part of SL Green's agreement with the city, it will also provide approximately $220 million of Grand Central Station–related infrastructure upgrades, which include construction of a new transit hall on the One Vanderbilt site, a 14,000-square-foot pedestrian plaza and subway platform upgrades.
Last month, SL Green announced that it had secured a critical $1.5 billion construction loan for the project, with Wells Fargo leading that group of financiers. At the same time, the developer said that it had signed TD Bank as an anchor tenant. The company will open a flagship branch in the building as well.
SL Green avoided a protracted legal battle over air rights by settling a lawsuit with Grand Central Station owner Midtown TDR Ventures in August. Midtown said it purchased Grand Central in 2006 hoping to cash in on its air rights, which Midtown estimated to be $880 per square foot. Midtown cried foul when, during air-rights negotiations with SL Green, the city rezoned the area around Grand Central, which allowed SL Green to move forward without a deal with Midtown.
Manhattan's office stock has increased 10% since 2000, but 25% of tenants needing 50,000 square feet or more had chosen new construction rather than existing space to meet their needs in that same period of time, according to The Wall Street Journal, citing data from CBRE.
New office-building construction is just one part of a New York City construction boom that resulted in a $61 billion economic benefit in 2015, up 7% from 2014. Construction-related activity accounted for $39 billion of that figure, and corresponding spending and output generated the balance.
The city's construction and supplementary employment added 300,000 jobs in 2015, with an average annual salary of $84,000. Residential building activity, which reached $14.9 billion last year, also factored in heavily to the increase.