Score this one a definite "win" for office development in New York City. In the most recent example of how far back the city's Times Square area has come, Reuters and Rudin Management have struck a deal with The Prudential Insurance Co. of America to build a $360 million, 30-story office tower as Reuters' U.S. headquarters on the northwest corner of 42nd Street and Seventh Avenue.
Construction on the tower begins this fall, with completion slated for early-2001. This marks the second major office development in as many years in Times Square. The Durst Organization is now coming out of the ground with its 4 Times Square project (NREI Feb. 1997).
The Reuters Building will contain about 855,000 sq. ft., of which Reuters will take 500,000 sq. ft., with options on another 100,000 - 200,000 sq. ft. There will also be a Reuters Financial Television studio facing Times Square. Plans call for about 80,000 sq. ft. of retail space, and there will be 34,000 sq. ft. of exterior signage.
Reuters is consolidating its 1,800 employees from seven different sites around Manhattan. Consultants for the project are Fox & Fowle Architects (architects), Severud Associates (structural engineer) and Jaros Baum & Bolles (mechanical engineer).
Rudin Management's Jack Lewis and William Rudin have gained a solid reputation in New York real estate circles as successful speculative developers. One of the firm's noted successes of late is the conversion of a Downtown Manhattan property into the New York Technology Center. But it is Rudin's long-standing relationship with Reuters that made a difference. Rudin owns and manages 40 E. 52nd Street, where Reuters has been a long-term tenant.
Reuters America Holdings hired Glenn Elliott in September 1995 to oversee its real estate operations and consolidate its properties around Manhattan. As Elliott recalls, Reuters America Chairman Michael O. Sanderson sent him a note suggesting the firm move into The Durst Organization's newly announced 4 Times Square development, which is now under construction. But Conde Nast moved quickly to tie up most of the space in that building, so other options had to be explored.
The exercise did convince Reuters that Times Square was where it wanted to be, as an international media company seeking to raise its profile and create a new image for its future operations.
A year ago Reuters began negotiations with Prudential on a Times Square development and brought along Rudin as the development partner. "They felt comfortable with us," says Rudin. "They knew what kind of developers we were. And we've always had an eye on Times Square."
"Mayor Giuliani, Governor Pataki, Charles Gargano, Deputy Mayor Randy Levine, New York Economic Development Corp. President Charles Millard and Wendy Leventer, acting president of the 42nd Street Development Project, deserve a lot of credit for convincing a company headquartered in London that's very conservative to move 1,800 employees to an area that five years ago you would have shied away from," says Rudin. "It was a commitment to stand behind this neighborhood and make an effort to clean it up so people would feel safe and there would be an excitement so they would want to work there."
"We had been looking to do this building for a few years," says Elliott. "The objective is to build a building that is generic enough in use, but technologically advanced. Our goal is to create something that is uniquely recognized in the marketplace for years to come."
The Reuters Building is "technologically smart," says Rudin, with raised floors throughout (13 feet slab to slab). Also, it will be the first building born in 2001 and the first New York project completed in the new Millennium.
At this writing, about 180,000 sq. ft. is left to lease. The space will be marketed as an uptown version of Rudin's successful Downtown Technology Center.