So, while the project marks the first foray into the New York commercial market for Parsippany, NJ-based SJP, it has all the makings of a can't miss project. It's also a natural brand evolution for SJP, which owns 14 million sf of office space primarily in New Jersey. It recently entered the Manhattan residential market with a pair of condominium projects, at 45 Park Ave. in Murray Hill and 247 W. 46th St. at Eighth Avenue.

"Our territory has always been the metropolitan area--New York and Pennsylvania, as well as New Jersey," says Steven J. Pozycki, SJP Properties president and CEO. "We've studied these markets for 25 years [but] we've been really looking at and zeroing in on Midtown for probably the last four years."

Amazingly, however, the prime 11 Times Square site--located at the corner of 42nd Street and Eighth Avenue, next to the historic Empire Theater and across the street from the Port Authority bus terminal and the Westin Hotel--was little more than a dirt hole with some government approvals as recently as this past spring. According to Stephen Siegel, chairman of global brokerage for CB Richard Ellis, who arranged the sale of the property to SJP, previous owners Howard and Edward Milstein simply had more pressing matters to attend to then building a ground-up office tower in Manhattan.

"They went through a separation of assets with other members of the family, and had to negotiate the ownership of the site in its current form," Siegel says. "They were so busy with their banking business and the repositioning of some existing assets, that they just didn't have the appetite to build a one-off office building. It's not like they didn't build it and it wasn't like they didn't sell it. They didn't choose to build it, not because they couldn't, and they didn't sell it because they didn't want to. They were content to hold it and build on it at some later point in time."

Having known Pozycki since his days operating out of Cushman & Wakefield's New Jersey office two decades ago, Siegel was well aware of SJP's desire to enter into the Manhattan office market and, putting two and two together, he broached the subject of selling 11 Times Square with the Milsteins.

Partnering with Prudential Real Estate Investors, SJP purchased the L-shaped site for $306 million, or about $350 per sf. "We basically had to put up $50 million the day after we met with the Milsteins," Pozycki explains. That amount was equal to roughly 16% of the final cost of the building. "We have close to 25 ventures with Prudential, and we are their largest office partner in the country," he adds. "Given the complexity of the situation and the speed of the timing, we couldn't have done it without them."

The deal was also aided by the fact that the site had already been shepherded through much of the Empire State Development Corp. approvals process by the Milsteins, who had considered several options for it, including condos and several mixed-use concepts as well as a spec office property similar to the one ultimately put forward by SJP.

Since they were bringing a much-needed spec office project to the last undeveloped site within the Empire State Development Corp.'s 42nd Street Redevelopment Project, SJP's plan for 11 Times Square has been met with little to no resistance from the city and state. "The ESDC was very responsive when they realized we would spec an office building in Midtown," Pozycki says. "They were incredibly supportive and amenable to the numerous changes we made to the concept and, as we advanced the drawings, it was a team that was very synergistic. We did have two options in the agreement between the Milsteins and Empire State: an office/retail concept and a multiple mixed-use office/retail/hotel/condo concept, which severely complicated the building vertically, transportation-wise. We really thought that the market was in need of a spec office property--there were so few sites left in Midtown Manhattan, and almost none that have a large floorplate. Which is what everyone in New York is looking for because increased rents are basically driving big corporations to increase densities per floor."

With the blessing of the ESDC, SJP and their team set about reconfiguring the building's layout with FXFOWLE Architects, who had been brought on by the Milsteins to design their version of the project during the early part of the decade.

"We increased the height of the building 50 feet just to have greater slab heights for the demands of the class A user both today and into the future," Pozycki says of the updated design for the building, which will reach a height of about 600 feet. "We probably made about 100 changes to the base building concept design. We changed the entire curtain wall to floor-to-ceiling glass, which is something that, in a class A building today, is almost standard. There were several areas [in the original design] that had more of a punched look, which cuts the views. We went from small windows with small views to panoramic views with new, state-of-the-art floor-to-ceiling glass."

According to Dan Kaplan, senior principal with FXFOWLE, 11 Times Square is going to be a "sort of an up-to-date version of the Times Square buildings from the wave of development in the late '90s," like the Conde Nast Building at Four Times Square and the Reuters Building at Three Times Square.

The Milsteins, Kaplan explains, "always saw 11 Times Square as a mixed-use building, where there was office space along with very major retail, perhaps an entertainment use and a significant amount of parking." SJP's philosophy, he says, is "this is primarily an office building, and it happens to have retail that is well-crafted, and signage." From an architectural standpoint--as well as a marketing one--the building is being conceived as the "western gateway to Times Square," according to Kaplan. "It's a two-personality building. The Times Square/42nd Street/gateway side has this interesting, outwardly sloping form. There is no other building in New York like that, where the floors will actually be bigger at the top then at the bottom. That creates a cutback down near the street to allow for the spectacular Times Square signage to happen. Then, on the 41st and Eighth corner, the building calms down, and a second personality emerges which is much more corporate, crisp and elegant, with a lot of glass. This blending of the building's two personalities creates its identity."

Tighe says that CB Richard Ellis has also been included in the discussions with SJP and FXFOWLE as to how to maximize 11 Times Square's appeal to a wide variety of tenants. "The floors are conceived in a way that it should be able to accommodate financial service, law firms and entertainment/media companies," Tighe says. "The upper floors are maybe more for law firms, the lower floors are more entertainment-driven, and, since financial services use both larger and smaller floorplates, they can go both ways.

In her research of what Midtown users are looking for, Tighe says potential tenants also want to know that "any amount of technology you bring in to the building" can be accommodated, and to have access to the widest possible array of transportation connections. They also want efficient, relatively column-free floorplates. "Moving around and reconfiguring your space is part of the way people do business now," she says.

Floorplates at 11 Times Square will range from 29,914 sf to 41,035 sf, with the larger sizes at the top.

"The desire of the city and the state is to have a building whose base is very festive and its top is basically an office building," Pozycki explains. "Our goal is that the base works well with the top--that the two uses work together. We have our office entrance on the 41st and Eighth Avenue side, abutting the New York Times Building, and our main retail along Eighth and 42nd, which is one of Manhattan's most festive retail corridors."

The retail component of the building will total approximately 55,000 sf, and occupy one floor below grade, the ground floor and one floor above. It has attracted attention from restaurants, stores and entertainments users, and could be divided up into any combination of those three uses, Pozycki says. "A lot of retail came on at once a few years ago but, as with office, this is one of the last new spaces for retail that will be on the market in Times Square for a long time," so there's a real demand.

As the last remaining undeveloped parcel in the Times Square district, 11 Times Square also presents the last opportunity for rooftop signage in Midtown, where no illuminated signage (outside of Times Square) may be erected above 58 feet. That's just one of the reasons why Pozycki and Tighe believe the building's most significant tenants could come from the entertainment arena.

"If you are an entertainment company, you really need to be in Times Square just like a Fortune 500 company might need to be on Park Avenue," Pozycki says. "Whenever the media wants to show New York for a football game or anything else, rarely do they show Park Avenue anymore, they use Times Square."

The short supply of office space meanwhile, has led them to dive into marketing much earlier than it expected to. "We are being asked to make presentations on a fairly regular basis, which we didn't think we'd be doing this early," Pozycki says. "We are talking to full-building users, and we are talking to tenants as low as 400,000 sf. I doubt, given the market today, that we will have many transactions less than several floors. My opinion on it is we will have less than five tenants for the entire building."

While no tenants were officially signed up at press time, Tighe says she expects the building will be entirely leased long before its completion date. "We've already responded to RFPs from a couple different companies, which started coming in once we were able to show how the building was going to lay out, and could demonstrate the economics of the building." Tighe says. "Certainly rents will be north of $100 per sf on average for the entire building. While that sounds like an enormous number, in 2006 somewhere between 8% and 10% of all the deals done in Midtown Manhattan will have been at $90 or higher per sf, and we're talking three years forward. Top tier buildings will all be commanding that kind of rent. And, right now, there are only three options for tenants 200,000 sf or greater in Midtown."

Says Siegel, "I think anybody with any reasonable size requirement three or four years out has to kick this tire and, pretty soon, if they don't, they won't have any other tires to kick."

This is music to the ears of SJP, which is currently buying materials and accepting contract bids with an eye towards a July groundbreaking. "We have 50% drawings at this point and we are designing as fast as we can," Pozycki says. "Certainly costs is an issue in New York today, and managing those is as complicated as managing the market risk. But the market knows this building is clearly going to have a July start and go forward with a late '09 completion. People can count on that--if we say we are going to deliver on a date, we deliver."