Schrödinger’s Times Square lease a good sign for Midtown office market

Real Estate

In a welcome boost for the Midtown office market, pharmaceutical software developer Schrödinger Inc. has signed a lease for nearly 109,000 square feet at Edge Fund Advisors’ 1540 Broadway, where it will move from Tower 45 at 120 W. 45th St.

The previously unreported deal, smack in the middle of Times Square, nearly doubles Schrödinger’s space in Manhattan and appears to be the largest new office lease commitment signed so far this year. It’s also auspicious for back-to-the-office believers, as the company’s tech-driven business is the type some analysts insist can be done from home.

Although brokers were silent due to strict confidentiality agreements, Schrödinger let the cat out in its recent 8-K SEC report. The company will have floors 21-24. Rents start in the $70s per square foot and rise over the 17-year term. The 8-K said the 17-year deal includes 16 months of free rent.

The tenant was repped by Cushman & Wakefield’s Peter Van Duyne and Alex Lachmund. The landlord was repped by JLL’s Peter Riguardi, Clark Finney and Frank Doyle.

A recently completed $40 million capital-improvement program at 1540 Broadway was a major lure, sources said. There is a new 27,000-square-foot amenity center designed by Gensler architects that includes a food hall, a new entrance and lobby, destination dispatch elevators and other touchless technologies.

A recently completed $40 million capital-improvement program at 1540 Broadway was a major lure.
A recently completed $40 million capital-improvement program at 1540 Broadway was a major lure.
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The tower will soon have available floors 27-35, previously occupied by Viacom, with asking rent of $85 per square foot across the block.

Even with the rent-abatement period, Schrödinger’s lease and expansion are unalloyed good news for the market — as was Beam Suntory’s just-under 100,000 square-foot lease at 11 Madison Ave. earlier this year.

That transaction went largely unacknowledged after we first reported it in February. We’ll see if the doom-mongers will remain silent as well over Schrödinger’s impressive Times Square commitment.

Dynamic Star, the Connecticut-based developer behind the proposed Fordham Landing complex in The Bronx, is shaving a slice off its holdings at the 30-acre site. The sale offering promises another developer the chance to build a large, tax-advantaged residential complex on a prime waterfront site.

Dynamic Star is offering 3.7 acres on the Harlem River where 1 million square feet of residential and/or community-use space can be built as-of-right. It is situated just south of the University Heights Bridge to Manhattan, close to Roberto Clemente Park and the Fordham Road subway station. The entire Fordham Landing ground lies between the river and the Major Deegan Expressway in the University Heights neighborhood.

Rendering of Fordham Landing
Rendering of Fordham Landing
Dynamic Star

The for-sale parcel comes with a New York state 421a tax abatement entitlement arranged by Dynamic Star in place, as well as Federal Opportunity Zone benefits.
The riverfront site is expected to fetch offers “north of $80 million,” said CBRE broker Dan Kaplan, who’s handling the sale.

Dynamic Star will still be in control of most of the rest of Fordham Landing. But the offering came as something of a surprise, as Dynamic’s plans for the larger site have been widely reported for two years.

“After the sale, we’ll still have about 14 acres,” Dynamic Star development director Brad Zackson said. The city owns certain parts of the site as well.

Kaplan explained Dynamic’s decision to sell: “The whole site is too big for them to do at one time. Post-COVID, they decided to concentrate on the industrial site nearby. That development will make the site we’re selling more valuable and vice-versa.”

Dynamic’s original plan was for a $3.5 billion complex that could be the city’s largest new development since Hudson Yards, with up to 2,380 apartments, including 720 affordable ones, an 800,000 square-foot life-sciences center as well as retail, a hotel and restaurants.

Dynamic Star, which also has several projects in Long Island City, bought a 2-acre concrete plant site at Fordham Landing in December. It also owns an 11-acre CSX rail site to the north.

The industrial sites need rezoning to be fully developed, which means a slog through the city’s Uniform Land Use Review Procedure.

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