The Mouse House is roaring into Hudson Square, but Disney needs a clean sweep to build its dream home. And like Mickey in the Sorcerer’s Apprentice, the company must take a broom to longtime office tenants in the current building at 304 Hudson.
Disney/ABC’s plan to develop and move to a new 1 million-square-foot-plus office tower with the new address of 4 Hudson Square requires the current tenants to vacate so that the building can be torn down.
The two largest tenants, 3.1 Phillip Lim and OTC Markets, which both have around 30,000 square feet, are now scrambling to find space at pricing they can afford, sources say.
Both tenants have hired Jeffrey Peck and Daniel Horowitz of Savills Studley for their search.
Another major tenant is PR Consulting with about 14,500 square feet on the seventh floor. The firm has clients in fashion, beauty and lifestyle.
Because of the tenants’ long occupancy at 304 Hudson St. and because former building owner Trinity Real Estate’s recent reluctance to deploy capital to make improvements or raise rents when it was targeting a demolition, sources said, the tenants’ rents are well below the current market — somewhere in the $30s to $40s per square foot — well below the range of $50 per square foot.
While the tenants have demolition clauses, they have various lengths of time to vacate, but all of the space is expected to be broom clean sometime in 2019.
Trinity transferred the property to Disney for $650 million on July 9, 2018, along with the adjacent 50 Vandam, 137 and 143 Varick and 275 Spring streets. The entire property, along with any new building, reverts back to the church by no later than July 8, 2117.
