MTA Changes Leasing Strategy for New Manhattan Transit Hub

After facing difficulties with retail tenants at its Grand Central Terminal transportation, dining, and shopping destination, where it directly leases space to tenants, the New York Metropolitan Transportation Authority (MTA) will change its strategy for its Fulton Street Transit Center in lower Manhattan. The MTA plans to lease all the space in the Fulton Street Transit Center—currently under development—to one company and let that firm manage it.

Last May, the MTA said that it would complete construction of the long-delayed Fulton Street Transit Center in 2014, seven years behind the project’s originally scheduled date. Parts of the center will open before the building is done, and most of the improvements to the subway, including easier connections between lines, will be finished by 2012. Once complete in 2014, the three-story glass and steel structure at the corner of Manhattan’s Fulton Street and Broadway will have 70,000 square feet of retail space. The structure is part of a $1.4 billion project that provides an underground connection for 10 subway lines and the PATH train to New Jersey. By transferring management duties to another company, the MTA said that it can focus on maintaining the underground hub.

Competition for retail tenants is anticipated to be intense. The Port Authority of New York & New Jersey has forged similar plans for its transit hub under construction nearby at the World Trade Center with mall operator Westfield Group, and Brookfield Office Properties is planning a $250 million upgrade to the retail space at the World Financial Center in the area.