New York Times

November 3, 2004



REGIONAL MARKET / MIDTOWN MANHATTAN



Sleaze-Free Times Square as a New Financial Center



By JOHN HOLUSHA





Jeffrey Peck, left, of Newmark & Company, and David Gershon, chief at SuperDerivatives, in Mr. Gershon's conference room at 7 Times Square.



Times Square, a once-seedy area that was rife with crime and lowbrow entertainment, has been transformed over the last decade not just into a destination for tourists and shoppers but also a home for companies seeking office space. Increasingly, this includes financial businesses that might previously have set up shop downtown in the financial district.



Among recent arrivals, an executive of a company that combines high technology with high finance said he chose the neighborhood because locating there conveys the idea of "an aggressive, fast-moving" operation. The head of another company, SuperDerivatives, which establishes the values of currency options contracts, said the location suggested his company was "very successful."



"Financial firms like to be near other financial firms," said David Gershon, chief executive of SuperDerivatives, from his corner office on the 35th floor of Times Square Tower, a new skyscraper on a block running from Broadway to Seventh Avenue and from 41st to 42nd Streets. " Morgan Stanley and Lehman Brothers, both clients, are just up the street; Reuters and Ernst & Young are right here; and there have to be 20 banks within walking distance."



The 1.2-million-square-foot building was developed by Boston Properties and opened in April. Officials of the company say it is 79 percent full, despite the demise of Arthur Andersen, the accounting firm that was to be the anchor tenant.



The building, also known as 7 Times Square, is the last of four skyscrapers that are part of the renewal of 42nd Street's intersection with Seventh Avenue and Broadway. Another accounting firm, Ernst & Young, occupies the entire building directly across Seventh Avenue, 5 Times Square, which was also developed by Boston Properties.



The northwest corner is 3 Times Square; it was jointly developed by the Rudin family and Reuters, the news and financial data company. Between 42nd and 43rd Streets on Broadway, 4 Times Square was developed by the Durst Organization and is known as the Condé Nast Building for the publishing company that is its principal tenant.



Most of the rest of the Condé Nast block, running east to the Avenue of the Americas, is to be occupied by 1 Bryant Park, which will be the biggest of the new towers in the area, a 2.1-million-square-foot building being developed by Durst and Bank of America, the principal tenant.



The new buildings are attractive to financial services companies, which want ultramodern space and do not shrink at rentals around $55 to $65 a square foot annually, said Jeffrey I. Peck, a managing director of Newmark & Company Real Estate.



These rents are roughly double those in the Wall Street area, even before city and state incentives are taken into consideration. Some tenants that have moved to Midtown say the difference could be a powerful lure for companies seeking bargains.



"People can get great prices downtown, and that may change things over time," Mr. Gershon said. "Right now, the cycle is trending more toward Midtown, and that may take a few years to reverse."



Mr. Peck, who recently brokered the SuperDerivatives lease and a 5,000-square-foot deal for a finance-related company in Times Square Tower, said some smaller companies were attracted to the prebuilt office suites available in some buildings. Taking space that is already finished means they can set up operations in weeks, rather than the months needed for finishing off raw space.



He said they were also attracted by the high-speed elevators and wireless Internet connections, or Wi-Fi, available in some new buildings.



The elevator system at Times Square Tower, for example, aims to minimize waiting time. After passing through security in the lobby, all visitors go by elevator to a sky lobby on the fifth floor. There, they face three banks of elevators, for the low-, mid- and high-rise sections of the 47- story building.



At the entrance to each bank, there is a keypad, where a visitor can punch in the desired floor. A light and a sound indicate which car will be first to go to that floor. Building managers say the system moves people to their destinations 25 percent faster than conventional elevators.



Kevin Gould, an executive vice president of Mark-It Partners, mentions the elevator speed as one of the building's advantages. He said the company recently made two acquisitions and the new site allowed it to consolidate all its United States operations in one place.



The company is moving into prebuilt space, but the appearance on a recent visit was one of controlled confusion, with workers adding finishing touches and meetings being held in a circle of chairs because the conference table had not yet arrived.



Mr. Gould said Mark-It had grown to more than 300 clients in three and a half years and was still growing. It serves financial companies by collecting their trading data on bonds and other instruments and accounting for their value, or "marking it to market" - hence the name.



"We looked at two spaces," he continued, "and took this on quickly because it is close to the banks and things like the hedge funds on Park Avenue." Mr. Gould said the convergence of subway lines at Times Square was another reason for choosing the location. "If we have to go to Wall Street," he said, "we can get there pretty quickly."



He said that from personal experience, he felt certain the area was growing into a financial center. "A month ago we signed a big contract with a hedge fund," he added, "and now they are opening offices down the hall."



Mr. Gould is aware of Times Square's onetime image, but considers that ancient history. "It was not even a consideration in our decision," he said.



Copyright 2004 The New York Times Company



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From the NYPOST:



April 18, 2004



You could soon be calling it "Times Square Warner."



The growth of Times Square to the north and the southward revitalization from the rejuvenated Columbus Circle is expected to meet somewhere on Broadway to create one of the hottest retail and entertainment corridors in the world.



"In addition to the Time Warner Center serving as an anchor to the north, and Times Square to the South, there has also been a tremendous resurgence in activity around Broadway and Seventh Avenue in the 50s," says Newmark's Jeffrey Roseman, one of Manhattan's top retail brokers.

In less than 10 years, the heart of Manhattan has transformed from the city's most crime-ridden blocks of boarded-up buildings, sex shops, T-shirt stores, drug dealers and prostitututes to the new home of such wholesome ventures as Toys 'R' Us and the flagship Red Lobster eatery.

There's even a bank going in underneath MTV that will be more "youth oriented."



"Right now Times Square is by far the most sought out retail market in New York City," Roseman said. "More so than SoHo, Union Square, and Madison and Fifth Avenues. Practically every chain you can think of is looking for a store there now."



And it's not just the retail chains that are making the move.

Following the lead of ABC, Conde Nast, Reuters and ESPN, businesses large and small are quickly gobbling up the 10 million square feet of new office space, bringing the total to over 25 million feet of office space in the billboard bastion.



According to sources, hip clothier Ecko is about to sign a lease on W. 42nd street. Other clothing stores expected to open in the area include H&M and Urban Outfitters.



Entertainment companies such as House of Blues and Ripley's Believe it or Not will eventually set up shop close to BB Kings and Madame Tussaud's wax museum.



Perhaps the biggest change in the past few years is the proliferation of upscale dining venues, a trend which began with restaurateur Steve Hanson's Blue Fin eatery in the W Hotel and David Emil's nearby Noche, and has culminated at the Time Warner Center, which may house several of the city's best restaurants. Restaurateurs Marc Packer and Guiseppe Cipriani are planning to open a supper club on 42nd St. Further up Broadway, the first West Side Serafina restaurant is expected to open this year. The latest word has Restaurant Associates, Philadelphia's Steven Starr, TV chef Bobby Flay and ARC restaurants all looking in the new corridor.



"Basically, there will be something for everyone," says Roseman. Just like Times Square has always been.