In a neighborhood known for its history of immigrants and tenement buildings and modern-day nightlife and dining scene, Essex Crossing, a $1.6 billion mega mixed-use project composed of nine sites totaling nearly 2 million square feet on Manhattan’s Lower East Side, announced in October it had signed telecom giant Verizon in yet another change for the area.
The company agreed to a 140,000-square-foot office lease at 155 Delancey St., with Verizon becoming the anchor tenant and housing its marketing department at Essex Crossing, where the office portfolio spans two buildings at 155 and 145 Delancey totaling 350,000 square feet.
The developers: Delancey Street Associates, a partnership of Taconic Partners, L+M Development Partners, BFC Partners, The Prusik Group and the Urban Investment Group within Goldman Sachs Asset Management.
Why it matters: Essex Crossing, which also includes over 1,000 residences, 300,000 square feet of retail and 100,000 square feet of green space, has brought energy back to properties that had been undeveloped from the 1960s up until 2013, when Delancey Street Associates won a request for proposals from the city and bought the land that would end up as the grounds for the mega project.
Verizon’s signing not only signaled a certain sense of confidence in New York and the continued demand for offices despite the growing remote working trend, it also showcased the potential to reshape an area that hasn’t traditionally been known for corporate digs. The lease also highlighted the importance of amenities and the broader environment of where an office sits because employers see them as key to helping them attract and keep talent.
What they’re saying: “Commercial space of this scale [in the area] didn’t exist until Essex Crossing,” said Ben Baccash, vice president of development at Taconic Partners. “Verizon leasing this amount of space has sent a message to the market. Essex Crossing as a mixed-use environment can be seen as a campus. When people think of a workplace, they don’t think of the four walls of the office anymore. They think what’s nearby ... that can appeal to my talent pool. Lower East Side has an amazing amount of restaurants, art galleries, cocktail bars and great independent shops. It has amazing neighborhoods where a lot of the millennial talent pool goes to meet friends and explore.”
Since Verizon’s lease, Essex Crossing has received inquiries from “a lot of corporate names” in the tech, advertising, media and information sectors, he said.
“The full potential hasn’t been realized,” Baccash said, adding Verizon and other future office workers will bring daytime traffic to the neighborhood and create more economic impact with the workforce eating out and spending in the area.
Work, live, play: That vision has guided Essex Crossing, and the developers want to cultivate the work-live-play concept with shopping on top of the vibrant dining and entertainment scene in the neighborhood. For example, Essex Crossing counts not only major retailers Target and Trader Joe’s among its tenants, it also has Regal Cinemas, a bowling alley, Bright Horizons day care center and the International Center of Photography museum. The historic Essex Market public market has relocated within the development, while below it, the Market Line food hall, featuring many well-known local names such as Pickle Guys and Veselka, has opened and is connected directly to the two office buildings.
“It’s really an ecosystem at the end of the day,” Baccash said, noting demand for Essex Crossing’s rental and condominium developments. “We’ve truly activated a part of the neighborhood that was totally underutilized.”
CoStar’s Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.