Welcome to CompStak Courier, your one-stop shop for interesting CRE news for the week.
NEW YORK CITY: Misys inked a deal for 23,492 square feet at RFR Realty's 285 Madison Avenue
Misys, a financial services software company, has inked a deal for 23,492 square feet for 11 years at RFR Realty’s 285 Madison Avenue. The Commercial Observer reported a $64 PSF asking price. According to CompStak data, Misys ultimately agreed to a starting rent of $59 PSF. That puts Misys's rent considerably below the starting rent of many of its neighbors, including GE Capital, which agreed to pay in the high $60s PSF in starting rent for its recent lease at the same property. It is also well below the average starting rent of $69 PSF for spaces across the Grand Central submarket.
DC METRO: DC Landlords Giving High TI Concessions and Free Rent Packages
Meridian Group recently acquired 1400 L Street NW in Washington DC from Mack-Cali Realty Corp. A majority of the building, 98%, is leased to the US Customs and Border Protection Agency, which is scheduled to vacate the space in 2018. Meridian is planning a multimillion dollar renovation of the building that will bring the building more in line with other class A buildings in the DC East End submarket. Space in 1400 L Street NW is currently being leased for rent in the mid $30s per square foot. According to CompStak, average class A space in the East End submarket is leasing in the low $50 per square foot range. Once the renovations are done at Meridian's newest DC property, they can expect to capture rents 66% higher than what the current in place tenants are paying based on market rates.
SAN FRANCISCO-BAY AREA: 180 Montgomery sells with in-place rents below average for CBD 180 Montgomery was recently acquired by Sidra Montgomery for $98M. Over the last 12 months, leases signed in the building had average effective rents of $59.18 per square foot. These rents trade at a 3.5% discount when compared other similar buildings in the North and South Financial District, which together had an average effective rent of $61.31. The newly acquired trophy building is fully leased according to Bisnow.
CHICAGO: Oak Brook Office Market Improves
There has been chatter that the Oak Brook office market is thriving, particularly for small and mid-sized spaces. CompStak decided to take a look at just how well office space has performed over the past year in the area. Excluding net leases, starting rents for office spaces are up 13.3% in the past year alone in and around Oak Brook. The average starting rent now stands at nearly $19.
BOSTON: McGraw Hill Education Doubles Space at Fort Point McGraw Hill Education has expanded its initial 12k SF lease at 281 Summer Street to cover 40k SF of space at the property. The firm plans to bring on an additional 50 workers at the Fort Point R&D space. According to CompStak, McGraw Hill’s original 12k SF lease was for $39 PSF, equivalent to an annualized rent of $475,956.
LOS ANGELES: Low consumer spending but industrial rents continue to rise
Despite slow consumer spending, the industrial space market continues to thrive. According to CompStak, starting rents for industrial spaces in Los Angeles and Orange County are up 9.3% over the past 12 months to an average of nearly $1 PSF.