While odds on Andersen ever crunching numbers in the 1.2-million-sf Midtown building have been lengthening ever since the Enron scandal broke, Andersen has repeatedly asserted its intention of honoring its commitment to Boston Properties. When asked in February if the firm would pull out of the Times Square deal, Andersen spokesman Patrick Dorton maintained an all-systems-go attitude. "There is no change in plans," he told GlobeSt.com. "We are proceeding as expected. We are absolutely proceeding as planned." Dorton could not be reached for comment.
But its poker face began to slip recently, as Andersen reportedly began hinting that it was considering occupying only part of the space it had leased, saying that other tenants wanted the space. Those hints turned out to be the top of a slippery slope yesterday when word began circulating that the deal was officially off.
Boston Properties senior vice president Robert E. Selsam, also interviewed in February, vehemently denied to GlobeSt.com that the Andersen lease was on shaky ground. "There is not one iota of truth in that. Not a word. Zero." Selsam was unavailable for comment regarding this story. Calls to Insignia/ESG, which brokered the deal, were also unreturned by press time.
The exit comes as a surprise to some in the real estate community. As one highly placed executive conjectured for GlobeSt.com recently, "I think Andersen will survive and return to its core business, and I wouldn't be surprised if they occupied the space." With the mountains of legal papers on desks throughout Andersen's corner offices, the timing of the move is also a surprise to some. "Last on Andersen's laundry list of key decisions is the disposition of that space."
In a recent interview, Cushman & Wakefield president of US Operations Bruce Mosler, while shying away from predicting what Andersen might do, did underscore the value of the space they have now abandoned. "What I can comment on is the caliber of the real estate and the ability to re-lease it," he stated. "That's Manhattan's new corporate row."
Ground was broken for Times Square Tower in September 2000 and completion is scheduled for 2003. The building was designed by Skidmore Owings and Merrill. According to reports published when the lease was signed in October 2000, Andersen is committed to the space for 20 years at roughly $70 per sf though other sources put the deal at closer to $55 per foot. The project is Boston Properties' second Times Square property. The firm also developed 5 Times Square, which is located across the street from the Times Square Tower site.
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