Wall Street Comes to Hell's Kitchen With Ackman's Office Project
(Bloomberg) -- Another piece of gritty New York City is giving way to the appetites of Wall Street.
By Monday, commercial-property lender Dwight Capital LLC will have settled into its new headquarters at 787 11th Ave. in Hell’s Kitchen, on a stretch that’s known for its car dealers and auto-service shops. The firm is the first office tenant to move into the building, which has gotten a more than $100 million overhaul. Within a year, Bill Ackman’s hedge fund, Pershing Square Capital Management, will settle in.
Ackman is part of the partnership that owns and is redeveloping the building, near West 54th Street and across from DeWitt Clinton Park. The Rafael Vinoly-designed transformation includes the addition of two new glass-enclosed stories and, on top of those, a deck with a tennis court.
The glitzy new offices for financial companies are a departure from the building’s 1920s roots as a service hub for Packard Motor Car Co. Yet in keeping with its heritage, about half the property, or 265,000 square feet (25,000 square meters), will remain devoted to cars. A Range Rover and Jaguar dealership is there now, and a showroom for Nissan and Infiniti is under construction.
Dwight Capital is taking about 20,000 square feet on the building’s 10th story, relocating from 250 W. 55th St. Pershing Square is taking all of the ninth floor and part of the 10th for its new headquarters, moving from 888 Seventh Ave., one of the most prestigious towers in the Plaza District.
About 155,000 square feet of offices at the property are still available, including a double-height section that includes parts of the sixth and seventh floors. Georgetown Co., leader of the ownership group, is seeking $79 a square foot for the remaining space. That’s a bit more than the $77.13-a-square-foot average for Midtown offices in the second quarter, according to a report by brokerage CBRE Group Inc., which is handling leasing at the building.
Jonathan Schmerin, managing principal at Georgetown, sees the project as part of the transformation of Hell’s Kitchen into an enclave for the affluent. He pointed to the Mercedes House building diagonally across 11th Avenue, with a Mercedes-Benz dealership at its base and apartments above, as a pioneer in the area.
“We don’t think of this as a trend,” he said. “We think of it as a shift.”
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