Empire State, 75, seeks return to glory

NEW YORK — The Empire State Building has survived its own plane crash, a fire and — in the movies at least — a love- inflamed ape swatting planes from its peak.

This week, amid mixed forecasts, hard times and costly renovations, the iconic building turned 75 years old.

Since the September 11 attacks, when it regained the double-edged boast of being the tallest building in Manhattan, the Empire State Building has fought to win back tenants.

But, echoing the comeback of King Kong, proponents say it is also poised to rise again.

The Empire State Building was officially opened on May 1 1931, as the world’s tallest building and a remarkable engineering feat.

But it was also born with abysmal timing, just as the Great Depression was deepening. It soon earned the nickname, Empty State Building.

There have been good times since then but clearly the building was hurt by the September 11 attacks, which scared potential tenants who feared it could be the next target.

In September 2001, 8% of the building’s commercial space was empty. Today, that figure is 17% compared with 6% for the surrounding area, according to the real estate firm Colliers ABR.

The Empire State’s management is fighting back with a massive renovation of windows, lifts, plumbing and security. More than $75m has been spent so far, although the improvements still cannot give prospective tenants wide-open floor plans due to the structure’s bulky columns.

“The Empire State Building is making a concerted effort to reclaim some of its past glory,” said David Hoffman, executive MD of Colliers.

“I’ve read so much about people trashing it,” he said. “I think they’re missing the point. It has humongous potential. That’s exciting for a real estate practitioner to watch.”

While some deride the landmark as old, others find cache in its gray-and-red marble interiors, understated Art Deco ornaments and the limestone-and-granite exterior, which was pierced by a B-25 bomber that crashed into the 79th floor in 1945, killing 14 people.

On Thursday last week a man tried to parachute off the 86th floor observation deck but police stopped him before he could claim a feat prized in the sport of base jumping.

The main structure rises to 381m, ninth tallest in the world, and highest in New York City since the Twin Towers were destroyed. The antenna and lightning rod reach 443m.

Rents for Empire State office space have lagged others in its area in the southern part of midtown Manhattan. Colliers shows an average asking price of $37,68 a square foot, in line with $37,92 for all of the midtown south district.

Rival real estate firm CoStar, which puts the building in a smaller designation known as Penn Plaza, shows rents in that area at $43,98 a square foot — 16% higher than for the Empire State Building.

Meanwhile, a contemporary and longtime rival, the Chrysler Building, rents space at a premium to its neighbours in the pricier Grand Central area.

While the Chrysler Building has benefited from its own remodelling, the Empire State Building has suffered from a long-running feud in which the lead ownership group, Wien & Malkin, has sought to oust the marketing and leasing agent, Helmsley-Spear. Both sides accuse the other of mismanagement — not the best publicity.

Still, some tenants just cannot stay away. Architect Ronnette Riley has rented space there for 19 years, and when her latest lease was up, she looked all over for something better but decided to stay. Now she will double her office space to 6000 square feet and move down from the 80th to the 74th floor.

“In one sense I like the (management) dispute,” she says. “It keeps the rent low.”

Article by: Daniel Trotta - www.businessday.co.za