By Bobby Carrozzo and Olivia Faria
Over the last year Hudson Square has attracted a host of well-known companies. Formerly known as the Printing District, the area was historically known for its large, loft factory buildings and more recently known for its millennial pull and TAMI migration. Surrounded by some of the most desirable neighborhoods of Manhattan—West Village to the north, SoHo to the east and TriBeCa to the South—the neighborhood has finally blossomed.
The Hudson Square rezoning of 2013 is the primary catalyst for the recent evolution. The rezoning supported the development of residential construction by allowing a 9.0 FAR residential component as of right for the first time, in combination with a 10 FAR for commercial and retail FAR of 1.0. There is also a possible 2.0 FAR bonus for inclusionary housing.
As a result of this rezoning, Hudson Square experienced a 24% increase in sales velocity in the 4 years after the rezoning versus the 4 years preceding it. Since 1Q 2013, there have been 54 sales transactions—13 of which were slated for development—totaling $5.7 Billion in dollar volume.
Moreover, average office vacancy rate has decreased 7.5% in the five years preceding the rezoning versus the five years after the rezoning, decreasing from 16% to 8.5%. During the same period, office rents increased 48%, growing from $48/PSF to $71 PSF.
Most recently, Hudson Square has had its share of trophy acquisitions. In 2018, The Walt Disney Company acquired 4 Hudson Square for $650 Million under a ground lease as the relocation site for its new 1.2 Million SF headquarters. Google recently unveiled their plan to develop “Google Hudson Square”, a $1 billion campus at 550 Washington Street, the former St. John’s terminal, 315 Hudson Street and 345 Hudson Street.
Notably, Trader Joe’s migrated to the neighborhood, and now occupies a 19,000 square foot store on the ground floor of One Soho Square to cater to the growth of the residential population and area workers.
Hudson Square’s growth within the past 6 years has been unprecedented. In six short years following the 2013 rezoning, the neighborhood has transformed into one of New York City’s most desirable destinations to live, work and play.
Bobby Carrozzo is a Senior Associate in the Capital Markets division of Cushman & Wakefield working alongside Robert Burton, Senior Managing Director, focusing on middle market investment sales. To date, Bobby has been actively involved in the procurement, valuation, marketing and sale of over $500 million of commercial property across the New York Metro area. He has developed partnerships with clients and has advised long time owners, institutional investors and high net worth clients on the laws and policies involved with owning and selling commercial real estate.
Olivia Faria is an Associate in the New York Middle Market Investment Sales Group of Cushman & Wakefield, where she works alongside Robert Burton, Senior Managing Director, focusing on Downtown Manhattan, including the SoHo, NoHo, Hudson Square, NoLita, and Chinatown submarkets. Prior to Cushman & Wakefield, Olivia worked at Cleeman Realty Group, an off-market investment sales firm focusing on grocery anchored retail centers.