NYC to Get 1,020-Foot Skydeck Near Grand Central Terminal

(Bloomberg) -- New York visitors are going to have another choice for a high-altitude view of the city.

SL Green Realty Corp. announced today that 1 Vanderbilt, the office skyscraper it’s building just west of Manhattan’s Grand Central Terminal, will have an indoor-outdoor observation deck more than 1,000 feet (305 meters) above the street. Foundation work has begun for the Midtown tower, set to be New York’s second-tallest at 1,401 feet and slated for completion in 2020.

The skydeck will join those at the Empire State Building, 1 World Trade Center downtown, the “Top of the Rock” at 30 Rockefeller Center, and one planned for 30 Hudson Yards that’s scheduled to be ready in 2019. SL Green expects its deck will be a “very high-margin business,” as the Empire State Building’s two observatories have been, said Rob Schiffer, a managing director at the company and the point person for the One Vanderbilt project.

“What could differentiate us is an experience that is unrivaled amongst the competing observation decks,” Schiffer said in an interview. “First and foremost is our location. Grand Central Terminal is one of the most highly visited attractions in New York and the world.”

The company announced plans for the skydeck at its annual investor conference. Chief Executive Officer Marc Holliday also said the company is in talks with a foreign investor for a $500 million equity investment in the skyscraper.

Grand Central

The observation deck will be directly connected to Grand Central -- whose vaulted ceiling and Beaux Arts architecture draw tourists as well as daily commuters -- with an entrance down a hallway from the train hub’s main concourse. Plans are being developed by Montreal-based GSM Project, which designed decks at the Burj Khalifa in Dubai, the world’s tallest building, and London’s Shard tower.

Schiffer declined to say what SL Green, New York’s largest office landlord, plans to charge for a visit the observatory. During the investor conference, the company projected the deck could generate $78 million of revenue against about $35 million of expenses.

Observatories have been a lucrative business at Midtown’s Empire State Building. According to reports by landlord Empire State Realty Trust, annual revenue from the tower’s two decks -- one on the 86th floor, the other on the 102nd -- grew almost 40 percent since 2011 and continued to increase even after the opening last year of One World Observatory at 1 World Trade Center in lower Manhattan.

“The ESB observatory has proved quite resilient in the face of new competition at 1 WTC, with results holding up much better than we expected,” Jed Reagan, an analyst at real estate research firm Green Street Advisors LLC, said in an e-mail. “The continued success of the business underscores the power of the Empire State Building’s global brand.”

Competing Observatories

Still, there may be a limit to tourist demand, according to Reagan. “One has to wonder how much bigger the NYC observatory market pie can really grow,” he said.

Empire State Realty had no comment, said a spokesman, Hugh Burns. Related Cos., which is developing 30 Hudson Yards on the far west side, said the building “will have unique programming and outdoor experiential elements. The package of experiences we will be delivering is unlike any other offering in the city.”

The outdoor platform at 1 Vanderbilt will offer views from 1,020 feet. That compares with the 1,100-foot outdoor deck planned at 30 Hudson Yards, which Related has called the city’s highest. One World Observatory is higher at 1,268 feet, but it is entirely indoors.

Helping to set 1 Vanderbilt apart will be its proximity to the Chrysler Building, one of New York’s architectural jewels, as well as the Empire State Building, Schiffer of SL Green said.

“Think of how beautiful that will be at night when the Chrysler is fully lit, to be up in the sky looking at its majestic facade,” he said.

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