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Wells Fargo has agreed to buy Neiman Marcus’ vacant space at 20 Hudson Yards for $550 million, a deal that confirms the fate of one of New York City’s largest real estate developments Change is happening.
The space, which totals 400,000 square feet spread over three floors, will complement the 500,000 square feet Wells Fargo already occupies at adjacent 30 Hudson Yards.
When Neiman Marcus committed to a 50-year lease in 2014, it was supposed to be the retail centerpiece of a $25 billion mixed-use development on Manhattan’s Far West Side.
But the high-end department store declared bankruptcy in May 2020, slumped by online shopping, a heavy debt load and the Covid-19 pandemic.
The decision by Oxford Properties, the master developer and partner of Hudson Yards, to close the store in July is a blow to the companies involved, just over a year after it opened with a lavish Champagne party.
Related CEO Jeff Blau has said in recent months that he would seek an office tenant to fill the space, rather than another retailer. The approach reflects developers’ belief that there is ample demand for the newest, best-equipped office towers in New York City even as remote working has pushed the broader office market into crisis.
It also marks a shift from Reliance’s initial view that offices at Hudson Yards would primarily bring traffic to its retailers and luxury apartments. Instead, those categories are underperforming, and three of Hudson Yards’ office towers (10, 30 and 55) are now full. Meanwhile, another company that counts BlackRock and Facebook as tenants is nearly full.
For Wells Fargo, the expanded headroom could come in handy as it embarks on its latest effort to build out its investment banking business. Tim O’Hara joined Wells Fargo last year from BlackRock and is based in New York and currently leads its investment banking business. Last week, Wells Fargo announced the hiring of former Morgan Stanley executive Thomas Nides as its new head of public affairs.
Related companies and Wells Fargo declined to comment.
Svlook
