Heavyweight Manhattan office landlord Vornado Realty Trust recently announced that the 164-year-old, Hartford, CT-based insurer Aetna will be relocating its corporate headquarters from Connecticut to the Meatpacking District. The insurance behemoth will move 250 employees (leaving 2000 behind in the Constitution State) into 61 Ninth Avenue: a new, Rafael Vinoly-designed boutique office tower under development just north of the Apple Store on Ninth Avenue. Bobby Cayre’s Aurora Capital is also part of Vornado’s development team.
Aetna leased 61 Ninth Avenue’s entire 165,000 square feet at an asking rent of $150 per foot. The tower is rising on the former site of Chelsea’s Prince Lumber store, and is located across the street from Chelsea Market and Google’s New York City flagship office space. It’s slated for completion later on this year and is also aiming for LEED Gold certification. Individual floor plates at 61 Ninth Avenue are all unique, feature private terraces, and exposed mechanical systems in order to maximize ceiling heights.
According to Lois Weiss, who reported the deal recently in the New York Post, the New York City Economic Development Corporation is providing a subsidy of nearly $134,400 per employee ($9.6 million in total) to Aetna in order to woo the insurer to the Big Apple. But it will also spend nearly $85 million to kit out the office space, which Weiss notes should at least in part quench critics of the city’s generous subsidy to Aetna.
How this plays out in the long run – particularly if forces like gentrification and the frothy real estate market in many cities make it cost-prohibitive for those workers to live anywhere close to the office – remains to be seen. But in the interim it portends more deals like Aetna’s and, potentially, more subsidies from local governments looking to capitalize on this growing trend.
Image credit: Vornado Realty Trust