S
teven J. Pozycki‘s SJP Properties and law firm Proskauer Rose have reached a term-sheet agreement for a prospective Proskauer move to new 11 Times Square, three different sources said yesterday.
It will take several months more to draw up an actual lease for 400,000 square feet in the 1.1 million square-foot tower. A completed lease is by no means certain and the talks could yet fall apart.
But the term sheet is a major milestone in Pozycki’s patient campaign to fill his $1.2 billion tower at Eighth Avenue and 42nd Street, which will be completed this summer but has yet to sign tenants.
A non-binding term sheet spells out all the main economic aspects of a landlord-tenant contract. It usually, but not always, leads eventually to a lease.
Beyond the obvious boon to SJP, a Proskauer move to 11 Times Square would have immense symbolic impact. It would validate not only SJP’s investment in the $1.2 billion project — a 35 percent equity stake with its partner, a Prudential real estate fund, Pozycki told us in 2007 — but the entire cause of new Manhattan office construction.
Driving the SJP/Proskauer talks are several factors:
* Thriving Proskauer needs a new home that it can custom-tailor to its needs, which is more easily done in a new building than in its current home at 20 year-old 1585 Broadway.
* The law firm is feeling increasingly squeezed at the Morgan Stanley-owned Broadway address, where it has 12 floors. The bank is headquartered there and “isn’t going out of its way” to accommodate Proskauer’s need for extra temporary floors it must have if it were to rebuild its existing space.
* A lease at 11 Times Square might be $30 a square foot cheaper than it would have been at Boston Properties’ aborted 250 W. 55th St. — a project Boston suspended a year ago after the collapse of lease talks with Proskauer to be its anchor tenant there.
A lease at Boston’s site might have cost $100-plus a square foot. SJP originally wanted that price for 11 Times Square, but last year the Real Deal re ported that Pozycki said he “would be real happy” with the high $70s, reflecting the mar ket’s decline.
* While SJP is represented by a CB Richard Ellis team led by Stephen B. Siegel, Proskauer is also repped by CBRE. Having the same brokerage work both sides doesn’t always lead to a deal — it didn’t at 250 W. 55th — but it never hurts.
Ever since 11 Times Square started going up two years ago, the many-faceted, glass-wrapped tower designed by FXFowle Architects has been the poster child for the supposed evil of speculative development. Most every story about rising vacancies has cited 11 Times Square’s obviously temporary vacant status to claim that the market will be weak forever.
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Financial firm DE Shaw & Co. wanted to downsize at SL Green’s Tower 45, aka 120 W. 45th St. At the same time, DE Shaw Research — an independent laboratory specializing in the arcane field of computational biochemistry, with offices in the same building — needed more space.
So, Steve Durels, SL Green’s executive vice president and leasing director, said DE Shaw Research, which had been subletting 30,000 square feet from DE Shaw, has taken a new, direct lease on 75,000 square feet, including its former sublet space.
The asking rent was $65 a square foot. Meanwhile, DE Shaw (the financial company) is weighing whether to keep the rest of its 80,000 square feet in the tower.
Despite sharing a name, the two firms are not affiliated, even though David E. Shaw, DE Shaw Research’s head and chief scientist, also founded the Shaw financial firm, where he’s no longer involved in day-to-day management.
DE Shaw & Co. also has space at 1166 Sixth Ave.
Easier to grasp is that DE Shaw Research is simply expanding at an address that Durels said is 98 percent occupied.
Durels also cleared up misconceptions about Aeropostale’s big new retail lease at Green’s 1515 Broadway.
The urban-fashion giant is indeed taking 17,000 square feet — but not, as reported elsewhere, in the “former MTV store,” which would be a miracle as the store has only 1,624 square feet.
In fact, the MTV store space remains on the market.
Aeropostale is taking over the Bank of America branch (5,500 square feet), plus two-thirds of the former MTV studio on the second floor — which, as we first reported last summer, MTV has given up. steve.cuozzo@nypost.com