A Fresh Take on CRE

The Real Deal with CompStak Data: Manhattan’s blockbuster office leases drop off in Q3

CompStak's awesome Research Director, Noam Shahar, was quoted in The Real Deal!

Manhattan’s blockbuster office leases drop off in Q3

Hospital operator’s $163M deal at 55 Water is quarter's most valuable
November 01, 2013 11:03AM By Hiten Samtani Though the Manhattan office leasing market continued to get stronger in the third quarter, the number of big-ticket deals fell considerably – indeed, only two deals were valued north of $100 million, compared to seven in the previous quarter, according to The Real Deal’squarterly ranking of Manhattan’s most valuable office leases. Although the quarter saw several large deals, they were signed in buildings that had relatively low rents, according to Noam Shahar, director of research at real estate information company CompStak. In contrast, the second quarter saw several large deals in trophy buildings, Shahar added. The operator of the city’s public hospitals and clinics signed the market’s most valuable deal — worth about $163 million — at 55 Water Street, according to the ranking, which covers office leases signed in Manhattan in the third quarter of 2013, ordered by dollar value over the lease term. The Real Deal used data from CompStak cross-referenced with data from commercial brokerages, CoStar Group, news reports and interviews with commercial brokers and real estate players. Though many brokers confirmed the transactions – which have been previously reported — none of them would comment on the financial terms of the deals, citing confidentiality agreements.  
  • 1)55water
    • 55 Water Street ($163 million) Landlord: Retirement Systems of Alabama Tenant: NYC Health & Hospital Corp. Area: Downtown Type: New lease Square Feet: 221,190 Term: 20 years Rent: High $30s Landlord Rep: CBRE (Mary Ann Tighe, Brad Gerla, Howard Fiddle, Evan Haskell) Tenant Rep: Cushman & Wakefield (Robert Ballard)

      This mammoth 3.6 million-square-foot, 52-story building took a big hit during Hurricane Sandy – the storm flooded the building’s lower floors with roughly 40 million gallons of sea water, forcing landlord Retirement Systems of Alabama to spend up to $100 million in cleanup, restoration and future safeguarding against floodwaters. So this quarter’s most valuable lease, with the city corporation that administers the MetroPlus healthcare plan, was a big boost. The deal left the tower with only 30,000 square feet of remaining vacant space.
    • 2)111-8th-avenue

      111 Eighth Avenue ($102 million) Landlord: Google Tenant: Beth Israel Comprehensive Cancer Center Area: Midtown South Square Feet: 98,825 Type: Renewal Term: 15 years Rent: High $60s Landlord Rep: CBRE (Kenneth Rapp, David Hollander, Doug Lehman) and Taconic Investment Partners (Matthew Weir) Tenant Rep: Jones Lang LaSalle (Robert Martin, Barbara Winter)

      Google opted to allow Beth Israel to remain in its nearly 100,000-square-foot digs, ending months of anxiety that the tech giant would push them out to make room for its own operation. The city-assessed value of the 2.9 million-square-foot building was $827.5 million, as The Real Deal reported, though open-market values are considerably higher.
    • 3)30RockefellerPlaza

      30 Rockefeller Plaza ($80 million) Landlord: Tishman Speyer Tenant: Baker Botts Area: Midtown Type: Renewal Square Feet: 104,161 Term: 10 years Rent: High $70s Landlord Rep: Tishman Speyer (Heather Kahn, Blythe Kinsler, Kevin Hoo) Tenant Rep: CBRE (John Nugent, Andrew Sussman)

      The global law firm hung tight to its space on the 43rd through 45th floors at the iconic Midtown building, where Tishman Speyer is planning to reopen the landmarked Rainbow Room by the end of the first quarter of 2014.
    • 4)230ParkAveHelmsley

      230 Park Avenue (Helmsley Building) ($80 million) Landlord: Invesco Real Estate, Monday Properties Tenant: ING Real Estate Area: Midtown Type: Renewal/expansion Square Feet: 144,000 Term: 11 years Rent: Low $50s Landlord Rep: Monday Properties (Jordan Berger) and Jones Lang Lasalle (Frank Doyle) Tenant Rep: Newmark Grubb Knight Frank (Moshe Sukenik, Neil Goldmacher) and Cassidy Turley (Steve Ernst)

      The insurance giant started off in 1984 with a 55,000-square-foot lease, and has been steadily expanding its dominion in the 34-story, 1.3 million-square-foot building owned by Invesco and Monday Properties, the New York Observer reported. In March, Clarion Partners, a former ING subsidiary, signed a direct 10-year lease for a 71,000-square-foot space in the tower.
    • 5)101Park_Tower

      101 Park Avenue ($70 million) Landlord: HJ Kalikow & Co. Tenant: Tiger Management Area: Midtown Type: Renewal Square Feet: 79,200 Term: 10 years on upper floors, five years on lower floors Rent: Low $110s for upper floors, mid $80s for lower floors Landlord Rep: Cushman (Clark Finney, Gus Field, David McBride, John Cefaly) Tenant Rep: JLL (Reid Longley, Martin Horner, Barbara Winter)

      The New York-based hedge fund opted to renew its longtime commitment to the 49-story, 1.3 million-square-foot building. The deal means Tiger will continue to occupy space on the entire 33rd, 47th and 48th floors.
    • 6)205E42nd

      205 East 42nd Street ($68 million) Landlord: Durst Organization Tenant: United Way of NYC Area: Midtown Type: New lease Square Feet: 48,836 Term: 30 years Rent: High $40s Landlord Rep: Durst (Tom Bow, Brandyl Frey) Tenant Rep: Cushman (Robert Thuss, Joseph Cabrera, James Kuhn, David Glassman)

      The United Way deal was a major vindication of the Durst Organization’s decision to convert the 21-story, 530,000-square-foot building’s floors into separate condominium interests, which were then marketed to nonprofits. The developer had earlier secured the City University of New York as an anchor tenant for 161,000 square feet of the space. Both deals were structured as leasehold condo interests; the two tenants will buy their spaces for a set period, then the ownership will revert back to Durst.
    • 7)633-Third-Ave

      633 Third Avenue ($66 million) Landlord: Time Equities Tenant: Empire State Development Corp. Area: Midtown Type: Renewal Square Feet: 104,200 Term: 10 years Rent: Mid $60s Landlord Rep: Time Equities (Brandon Medeiros, Nadja Galloway) Tenant Rep: NA

      Time Equities’ CEO Francis Greenburger cut the city a sweet deal at this 40-story building that allowed it to save millions of dollars on rent. Before the renewal, Empire State Development Corp. was paying rents of about $85 per square foot, according to CompStak. Time Equities also struck a similar deal with Gov. Andrew Cuomo’s office, which renewed its 40,000 square feet at the 790,000-square-foot tower.
    • 8)304ParkAveSouth

      304 Park Avenue South ($65 million) Landlord: SL Green Realty Tenant: IMG Worldwide Area: Midtown South Type: Renewal/expansion Square Feet: 72,080 Term: 15 years Rent: Low $60s Landlord Rep: SL Green (Howard Tenenbaum, Gary Rosen, Steven Durels) Tenant Rep: CBRE (Michael Laginestra, Rocco Laginestra, Christopher Mansfield)

      The global sports, fashion and media firm opted to take a larger chunk of space at the 12-story, 215,000-square-foot building that SL Green bought in May for $135 million.
    • 9)7877thAve

      787 Seventh Avenue ($64 million) Landlord: AXA Financial Tenant: UBS Area: Midtown Type: New lease Square Feet: 120,687 Term: 9.5 years Rent: Mid $50s Landlord Rep: CBRE (Howard Fiddle, Joan Meixner) Tenant Rep: CBRE (Unknown)

      The Swiss banking giant opted to relocate some of its employees from 299 Park Avenue – where it currently has about 46,000 square feet – and consolidate its Midtown presence into the 787 Seventh Avenue building, as previously reported. The bank is reducing its Midtown presence by about 300,000 square feet in an effort to cut head count globally.
  • 10)161aveoftheamericas

    161 Avenue of the Americas ($51 million) Landlord: Stellar Management Tenant: Warby Parker Area: Midtown South Type: New lease Square Feet: 81,000 Term: 11 years Rent: High $50s Landlord Rep: Cushman & Wakefield (Andrew Peretz, Josh Kurlioff) Tenant Rep: Studley (Mike Matthias, Erik Schmall)

    Warby Parker, eyewear supplier to well-heeled millenials, became Stellar Management’s first office tenant at One Soho Square, the 748,000-square-foot office tower project that aims to combine 161 Sixth Avenue and 233 Spring Street, as previously reported. The company will bid adieu to its current offices at Jared Kushner’s Puck Building at 295 Lafayette Street.
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