United Nations Buildings to Undergo $500M Makeover
Officials have announced a $500 million development plan for One and Two United Nations Plaza in Manhattan. Under the agreement, the United Nations has also committed to long-term leases of unspecified length at the properties.
The redevelopment is being financed by the United Nations Development Corp., a public benefit corporation founded in 1968, which will issue as much as $380 million in bonds for the project. Goldman Sachs and Siebert Williams Shank will be the underwriters for the financing.
The plan calls for a number of top-to-bottom building renovations, overseen by architectural firm Spacesmith, whose other projects include the U.S. embassies in Mexico City, Turkey and Indonesia, a number of consulates, the Staten Island Family Justice Center and the Queens Flushing Library, just among its civic designs. The scope of the UN Plaza project will be about 900,000 square feet.
Cosentini Associates has been tasked for the mechanical, electrical and plumbing work, with Turner Construction Co. as the overall construction manager, which inked a Project Labor Agreement with the Building and Construction Trades Council. Work is slated to begin sometime in the second quarter and conclude in about two years.
New York City Mayor Eric Adams made the announcement, asserting that the plan would create about 18,000 jobs. As an employer, the UN is already one of New York City’s major ones, employing about 20,000 people, mostly in office positions.
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Besides cosmetic upgrades, the buildings will receive up-to-date energy efficiency systems under the aegis of the state’s BuildSmart 2025 initiative, whose goal is to achieve 11 trillion BTU of energy savings at state facilities this year. By way of comparison, total energy production in the entire state (in 2022) was 512 million BTU, according to the U.S. Energy Information Administration.
Other renovations will be undertaken by tenants in their own space, and there will also be building-wide fire safety system upgrades, and changes to align the structures with updated disability codes and regulations. CBRE acted as advisor to UNDC in the project, and Newmark acted as advisor to the UN for the project.
A slice of history
Famed worldwide, the 1950s UN headquarters building was only the initial development in Manhattan’s Turtle Bay neighborhood. The 358,000-square-foot One UN Plaza and the 369,000-square-foot Two UN Plaza, which include office space but also a hotel on the top floors, along with Three UN Plaza, were developed to meet the needs of the UN as it grew during the 1970s and ’80s.
The redevelopment of One and Two UN Plaza, which are owned by the UNDC, will enable further consolidation of UN personnel, according to the mayor’s office. The United Nations Children’s Fund, which maintains its global headquarters at Three UN Plaza, will own the building in 2026.
NYC office market sees renewed strength
The announcement comes at a time when the New York office market is making something of a comeback from pandemic-era lows. Net absorption for 2024 came in at a negative 5.7 million square feet, though total leasing was 38.1 million square feet, a post-pandemic high, according to Newmark data.
Though still negative, the 2024 absorption represented a considerable improvement for the Manhattan office market, and closer to pre-pandemic levels, such as in 2016, when absorption was exactly the same, Newmark noted. In 2020, there was negative absorption of 20.8 million square feet of office on the island, and in 2021 that total had expanded to 23.6 million square feet.
Overall availability in the Manhattan office market was down 70 basis points quarter-over-quarter in the fourth quarter of 2024, Newmark reported, to 17.9 percent. In Midtown, which includes Turtle Bay, availability contracted much more quickly, down 350 basis points between the third and fourth quarters.
Newmark also reported that leasing activity in Midtown rose to 27.8 million square feet in 2024, the highest level since 2019, and 23 percent higher than the historical long-term average for that metric.
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