Square Feet: Downtown Landmark Makes A High-End Play

In a leap of faith in the Lower Manhattan office market, a group of real estate developers is creating what would be the financial districts first office tower with a country clubs exclusivity — and perhaps its extraordinary membership fees — in the Woolworth Building.

Richard Woodward, left, an associate at Gerner Kronick & Valcarcel, and Randolph H. Gerner, a principal, at the Woolworth Building.

The group, 233 Broadway Owners, led by the developers Steven C. Witkoff and Ruben Schron, plans to create an office club on the top 25 floors of the Woolworth Building, one of New Yorks signature skyscrapers. The intent is to attract affluent tenants like hedge funds and private equity firms.

The Woolworth Building, a striking Gothic structure at 233 Broadway, between Park Place and Barclay Street, was once called the Cathedral of Commerce.

After the renovation, the tower will have its own private entrance and lobby off Park Place adjacent to the lobby designed by the buildings architect, Cass Gilbert. The new lobby will attempt to match the opulence of the original one with Italian glass ceiling tiles and fine millwork, but it will also have large high-speed elevators.

The top 25 floors of the building, which were once lower-rent floors occupied by tenants like dentists and barbers, have been gutted. Ranging from about 3,500 to 8,000 square feet and once slated for conversion to luxury condominiums, the larger floors are now being converted into plush offices, while the smaller floors will contain private meeting rooms and a dining room for upper-floor tenants.

Tenants will have use of a private observatory deck on the 58th floor of the 60-story building, and the round elevator encased in glass serving the highest floors is being rebuilt. In the base of the building, the developers hope to restore the original swimming pool used by Frank W. Woolworth. They would also like to add a fitness center.

Motivating the developers is the fact that about a dozen select office towers in Midtown Manhattan, including 712 Fifth Avenue and the Seagram Building, have achieved rents of almost $150 a square foot, or 75 percent more than the average asking rent of $85.28 for premium space in Midtown, according to Jones Lang LaSalle, the commercial real estate services firm.

Midtown was able to take its signature buildings and make them very important destination buildings for certain tenants, said Randolph H. Gerner, a principal at Gerner Kronick & Valcarcel, the architecture firm designing the Woolworth renovation. The Woolworth Building is already a destination building, so it seemed like a logical jump to create a similar product.

The qualities that make the Midtown buildings attractive to small wealthy firms are relatively small floors of less than 14,000 square feet — called boutique space, which can provide full-floor identity — as well as fabulous views, often of Central Park, brokers said.

The Midtown towers typically have well-appointed lobbies, top-notch security and technology, and convenient parking for limousines. Part of the buildings appeal is their proximity to one another, as well as to fashionable shops, luxury hotels and Fifth Avenue residences.

Those qualities — and especially the rents — may be difficult to replicate in Lower Manhattan, brokers said, even in the Woolworth Building, which was built in 1913 and was then the tallest building in the world, at 792 feet.

The developers said they expect the rebuilt floors to be occupied by the end of 2008. While they said they were uncertain about the cost of the renovation or the prospective rents, there is no doubt that the rents will be higher than average for premium space downtown, which is about $50 a square foot, said Barry Pincus, the president of Phoenix Asset Management, which is in charge of operating and developing the building on behalf of the ownership.

The top floors of the building, with 360-degree views that include the Empire State Building, the Statue of Liberty and more distant landmarks, may achieve initial rents of $60 to $75 a square foot, said Peter Riguardi, president of the New York region of Jones Lang LaSalle.

The belief that rents can go much higher downtown reflects not only an overflow in commercial demand from Midtown to downtown, but also to the rapid residential growth of Lower Manhattan, he said.

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