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THE STEEL BEAMS OF Times Square Tower rise 32 stories in the air, a sight that ought to gladden a developer's heart. But there's something missing from this picture-the sign that would have said, "The Future Home of Arthur Andersen."
The accounting giant leased half of the 1.2 million-square-foot skyscraper in October 2000. But now the firm is kaput, brought down by its dealings with scandalridden Enron. And Boston Properties Inc. doesn't have any tenants for the handsome office tower it's building.
An insurmountable crisis?
Probably not. In a sign of the underlying financial strength of the New York City real estate market, Times Square Tower is the only office-construction project in Manhattan that's in this kind of trouble. And even its future is likely to be saved by the one sector of the rental market with some strength and momentum-law firms.
Someone will step in
"There's always a user group that comes to the forefront, whether it's an up market or a down market," says John Maher, a senior vice president at brokerage CB Richard Ellis Inc. "This is a testament to the vitality of New York City."
One of the most significant things about the current market downturn has been the lack of empty new buildings, in sharp contrast to the real estate slump of a decade ago. Throughout the 1990s, lenders were careful to demand that projects have anchor tenants and that developers invest a...