Manhattan’s largest office building doesn’t enjoy a sexy public profile, but it sure knows how to charm new tenants. A 270,000- square-foot lease at 55 Water St. with digital-payroll and benefits systems specialist Justworks is among the year’s largest corporate moves — and sets the 53-story behemoth back on the path to full occupancy after a few big defections.
Justworks’ relocation from the Starrett-Lehigh Building in West Chelsea leaves only about 400,000 square feet available at 55 Water, said Howard Fiddle, leader of a CBRE leasing team. “Only” might sound ridiculous for such a block anywhere else, but 55 Water St. has nearly 4 million square feet — making it the nation’s second-largest office address by floor space since the Twin Towers were destroyed on 9/11 (only Chicago’s Willis Tower has more).
“We have more demand than available space,” Fiddle said. He added that he’s “trading paper” with several large possible tenants.
Retirement Systems of Alabama, which oversees three pension funds, bought 55 Water St. from developer Olympia & York in 1993. It has since invested hundreds of millions of dollars to upgrade it and keep it competitive. The property is valued at around $1.5 billion and reels in a reported $155 million in rent revenue annually.
But the pension funds’ real estate arm, New Water Street Corporation, had to scramble to save 55 Water from ruin after Superstorm Sandy flooded its lower floors in 2012. The project involved pumping more than 32 million gallons of seawater out of the first three floors and lower level — and succeeded in getting the building reopened in under a month.
Since then, the tower’s mostly institutional tenancy evolved to include fashion and media. Hugo Boss moved its corporate offices there in 2014 — coincidentally also from the Starrett-Lehigh Building. S&P Global is the largest tenant with almost 1 million square feet.
“Our new-economy type tenants like the large floors and proximity to Brooklyn,” Fiddle noted. “A few years ago, a company like Justworks wouldn’t have considered 55 Water St.”
In a market that favors buildings either brand new or atmospherically aged, 55 Water St. had to overcome its 1973 aura. The tower stands on Manhattan’s most charmless office corridor. Plans to beautify Water Street and improve its dull retail mix have yet to go anywhere. The lobby of 55 Wall St. still has a cold feeling despite adding a coffee stand for tenants only and new windows facing a small park on its south side.
But 55 Water St. has great strengths to offset the negatives. Asking rents of around $58 a square foot are a bargain over those in Midtown or newer towers downtown. While 65,000-square-foot floors are scarce elsewhere, “we have 50 of them,” Fiddle chuckled.
Plus, the beautifully landscaped, third-floor Elevated Acre overlooking the East River is one of the city’s finest privately owned public parks, open to everyone and now home to an alfresco bar and grill.
A year ago, 55 Water faced having more than 700,000 square feet to fill. But the owners drew on its assets to swiftly refill much of it. A big breakthrough came when EmblemHealth, which had considered moving, re-upped in May on 440,000 square feet as The Post’s Lois Weiss first reported.
The Justworks move is also good news for the downtown market as a whole, where availability fell by 0.3 percentage points, to 11.6 percent, in May, according to Colliers International’s Market Snapshot.
The 55 Water ownership was represented by CBRE’s Fiddle, Evan Haskell, Brad Gerla, Dave Caperna and Mary Ann Tighe.
Justworks was repped by Cushman & Wakefield’s Chris Helgesen, Peter Trivelas, Dirk Hrobsky and Gary Ceder.
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