Hudson Yards Developer Fills Former Neiman Marcus Space with Office Tenants
By: Hadassa Kalatizadeh
Hudson Yards developer, Related Companies, created an epicenter in New York City’s new West Side, boasting some 18 million square feet of commercial and residential space. In March 2019, the company opened a luxury mall in Hudson Yards to complete the package. Neiman Marcus inked a deal to open its first Manhattan store there, becoming the anchor tenant of the $25 billion multi-building retail, residential and office development. But by September 2020, Neiman shuttered the store, as vacancies soared throughout the city, due to the effects of the pandemic. The store’s departure left Related with some 188,000 square feet of empty space, as well as the loss of its marquee tenant, which was expected to lure shoppers to the mall.
Now, after 16 months, Related Cos has found new potential tenants for the space vacated by Neiman Marcus—but it won’t be a luxury retailer, or a single tenant. The space is being converted into offices. NYC office spaces are still slowly getting back into the swing of things after so many employees went remote, working from home. The commercial real estate rebound hit a glitch again recently as the omicron variant threatened the city all over again. Still, Hudson Yards has a lot to offer businesses and is confident that demand for its office space will surge once more.
“Companies are thinking forward beyond that full return to the office, and making the decision to take even more space,” said Jeff Blau, Related’s chief executive officer, in an interview with Bloomberg Television’s ‘Wall Street Week’. “We’re feeling pretty optimistic about the office side.” He said more Big Apple companies are expecting to bring employees back to their desks this month. He expects companies with office space in Hudson Yards to take on additional space in order to space things out more. Blau noted that Hudson Yards commercial real estate has seen somewhat of a better comeback than Midtown, maybe because of less crowded commutes. He said in recent weeks, Hudson Yards has been roughly 40 percent full.
Retail too will return eventually, but it will take longer for retail to bounce back. “If you take a look at retail in New York, I think it’s in a hiatus, OK? It’s like a winter animal, right? It goes to sleep for the winter. I think it’s in that state right now, but it will come out again, I strongly believe that”, NYU Marketing Professor Russ Winer, had said when news of Neiman’s departure was first reported.
