The planned One Grand office tower, a 430,000-square-foot development at the corner of Grand and Varick streets, has yet to sign any leases approximately one year into its marketing period. Developers are facing a challenge as prospective tenants in Hudson Square prioritize immediate availability over new construction.
Hudson Square has emerged as one of Manhattan's most sought-after commercial subdistricts. Leasing volume in the area, roughly bounded by Clarkson and Canal streets and West Street and Sixth Avenue, has surged from under half a million square feet in 2024 to more than 1.5 million square feet so far this year. This boom is evidenced by significant deals including Disney's new Manhattan headquarters at 7 Hudson Square, Anthropic's lease for the entirety of 330 Hudson Street, Google's acquisition of St. John's Terminal, and PayPal's 261,000-square-foot lease at 345 Hudson Street/555 Greenwich Street.
Kristen Morgan, part of the JLL leasing team for One Grand, attributes the slow leasing pace to the urgency of tenant needs. "They want butts in seats right away," Morgan said, noting that One Grand is expected to take 36 months to build. She described the current market as a stark contrast to two years prior, when Hudson Square was less desirable.
"Tech was quiet for a while after COVID, but once people realized how easy it was to get there from uptown, Brooklyn and New Jersey, it took off," Morgan added. The JLL team also includes Mitchell Konsker, Matt Astrachan, Peter Riguardi, and Clark Finney.
In the second quarter, Hudson Square's overall availability decreased by 2.1% year-over-year to 16.6%, a figure reported before Anthropic's substantial lease commitment. The subdistrict's appeal to tech, AI, and media firms is bolstered by its older, atmospheric buildings and convenient mass transit access, which also attract younger employees and have spurred growth in fitness-oriented retail and restaurants.
One Grand is designed with features attractive to tech firms, including open floor plates, large windows offering city views, 20,000 square feet of outdoor space, a roof deck, and extensive amenities. The asking rents average $185 per square foot. Colleen Wenke, president and COO of Taconic Partners, indicated that construction could proceed without an anchor tenant, as they are in discussions with several parties. She highlighted that One Grand offers the neighborhood's only opportunity for new, purpose-built space.
Unlike 7 Hudson Square, which was built specifically for Disney, many other large tenants in the district have occupied existing buildings, some over a century old. Anthropic's current location at 330 Hudson, for instance, was originally built in 1910.
