One of the most celebrated ways to mark the turning of a new year is to watch “the ball drop.” Specifically, the Waterford crystal ball at One Times Square that…
In 1997, the investment management company Jamestown (with then-partner Sherwood Equities) paid Lehman Brothers $117 million for One Times Square. This was more than four times the amount Lehman Brothers paid for the building less than three years earlier and amounted to more than $1,000 per square foot at a time when the average price for Manhattan office buildings was around $150 per square foot.
One Times Square today, surrounded by 3, 4, 5 and 7 Times Square (Source: Richard Charkham)
That purchase price was due in part to the building’s ad placement offerings, which can cost several million dollars a year. With the presence of these ads, it’s not surprising that the building hosts no office tenants today. There is also only one retail tenant on the ground floor and basement. Despite this, the One Times Square building and the area around it have a very interesting history of redevelopment.
THE EVOLUTION OF TIMES SQUARE
Times Square was known as Longacre Square until 1904, when the New York City mayor renamed the area in honor of the recent relocation of the New York Times headquarters. The 22-story One Times Square building served as the paper’s home from 1904–1913, during which time it also became the home of the New Year’s Eve ball drop. The building later became the first site of a moving news ticker in 1928.
One Times Square in 1905. The Astor Hotel, demolished in 1967, is on the right. (Source: The New York Public Library Digital Collections)
But after that time, the area of New York City along West 42nd Street became a veritable sleazy underbelly known as the “Deuce” and memorialized in the 1969 movie Midnight Cowboy. To improve the area, the Board of Estimates (BOE) approved the Times Square Development Plan in 1980. What was not known was that the plan, which involved the redevelopment of 13 acres, would be completed five governors, four mayors, two real estate booms and busts and 47 lawsuits later.
Times Square Development Map (Source: Colliers)
In 2010, the first tenant moved into 11 Times Square at Eighth Avenue and 42nd Street. That building is one block north of what is now the headquarters of the New York Times; those two buildings replaced the Merchandise Mart that was in the original plan approved by the BOE but never built.
Four office towers were built around One Times Square: 3 Times Square (home to Thomson Reuters), 4 Times Square (formerly the home of Condé Nast and still the headquarters of Skadden, one the world’s largest law firms), 5 Times Square (headquarters of Ernst & Young) and 7 Times Square (home to multiple tenants). Very close by are the offices of Morgan Stanley, Viacom (on the old site of the Astor Hotel), Salesforce and Bank of America.
TIMES SQUARE KEEPS UP WITH THE TIMES
When Disney transformed the New Amsterdam Theatre in 1997 with the first major investment in the “Deuce”—following the establishment of the MTV studios (owned by Viacom) at 1515 Broadway—there were fears that Times Square would become a second Disneyworld. However, Condé Nast and Thomson Reuters soon followed.
In fact, the development plan has been very successful: the New York Times is still very much in the area, Microsoft leased 230,000 square feet at 11 Times Square in 2014, Snapchat, MongoDB Inc. and National Geographic are all at 229 E 43rd Street and Salesforce is just to the east.
Times Square is very much at the epicenter of media and new technology—ready to move forward as the ball continues to drop each year.
A lawyer by training and background, Richard is Executive Director of Colliers International in New York. For the last 20 years he has advised corporate tenants globally on how to avoid the pitfalls that landlords lay in store for them. When not working with clients or thinking of innovative ways to assist them, Richard spends his time immersed in history, theater, travel and reading.