WHEN office buildings in prime locations are reclad and “repositioned,” the payoff to the owner is almost inevitable, if not always instantaneous.
Take the LeFrak Organization’s 40 W. 57th St., which launched a $30 million capital improvement program five years ago.
The redesigned tower has drawn high-flying hedge funds to its office floors and glamorous restaurant Nobu 57 to its elegantly enhanced retail arcade.
Now it just got the icing on the cake: a 110,000 square foot lease on the top-five floors with Highbridge Capital Management, which is expanding and consolidating from several Midtown locations.
The asking rent was $130 a square foot on the 30th through 32nd floors and $140 on the 33rd and 34th floors. The Highbridge deal all but completes the releasing of seven floors being vacated soon by Bank of America.
Only one small space remains in the 700,000 square foot tower – some 25,000 feet on the 27th floor – and “it will be absorbed by existing tenants,” said LeFrak Organization President Richard LeFrak.
The Highbridge Capital deal is one of those big, recently signed transactions that gives landlords and brokers confidence.
“It’s an interesting story because the leasing market is a little sloppy now – is that a good way to put it?” LeFrak chuckled.
The tower’s other large office tenants include Nautica and Wells Fargo.
The capital upgrades included a new skin, HVAC system and elevators, and increased generation and cooling capacity. There will also soon be a long-promised entrance lobby on West 57th Street.
Highbridge was repped by Cushman & Wakefield’s Franklin Speyer and Louis D’Avanzo. CB Richard Ellis’ Howard Fiddle repped LeFrak.
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A new retail condo is offering investors the rare (maybe unique) chance to own the commercial portion of a building designed by French starchitect Jean Nouvel.
Studley’s Woody Heller and Will Silverman are taking bids on the retail component of 40 Mercer St., the 13-story luxury apartment building wrapped in glass, steel and wood that was Nouvel’s first completed Manhattan project. Hines Interests developed it, which is offering the retail component as a joint venture with Andre Balazs.
The condo unit for sale, known as 465 Broadway, has 9,400 square feet of floor space at sidewalk level. It’s currently leased to three high-end stores – Bose, Dermalogica and Vivienne Tam – as well as Wachovia bank.
Heller predicted a sale price “in the $50 million range.” He said the appeal of the unit – both as a long-term investment to a buyer and to retail users – is that modern store space is almost nonexistent in SoHo, least of all in a building designed by one of the world’s most celebrated contemporary architects.
Cast-iron facades, windows high above street level and interior columns are romantic, but not necessarily suited to contemporary stores, Heller said.
Silverman noted that the glamorous shops at 40 Mercer also reflect the “southward migration of SoHo as a shopping district. When Bloomingdale’s opened a few years ago south of Spring Street, it began moving the center of gravity south.”
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It has been a long time coming, but the Theater Development Fund’s dramatic new TKTS booth and Father Duffy Square plaza reconstruction in Times Square are 90 per cent done and “the current completion date is June 20,” said Times Square Alliance President Tim Tompkins.
Getting the job done has been “one of the most painful experiences of my life,” Tompkins said, half kidding.
The Alliance has managed the $13 million project backed by Mayor Bloomberg and several city agencies in the north end of the “bowtie,” between Broadway and Seventh Avenue and West 46th and 47th streets.
The widened traffic island will feature what Tompkins has called a “Spanish Steps for Times Square” – a south-facing slope of red glass steps.
After ground was broken in May 2006, planners hoped to finish by the end of that year. The collapse of one of the original contractors was one reason for repeated delays.
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Boston Properties got the go-ahead in court to enter and begin shoring up the Joseph Moinian-owned 241 W. 54th St. so it can finish demolishing No. 247 next door.
As we’ve reported, No. 247 is the last building that Mort Zuckerman‘s company must take down to make room for Boston’s new office tower on the block.
But Moinian was holding up the work by denying Boston access to No. 241, potentially threatening the planned completion by January 2010 of the 1 million square-foot tower.
Last week, a state Supreme Court judge gave Boston the green light to start reinforcing No. 241, which will allow Boston to take down the rest of the building to street level.
It’s not quite over, though – Boston and Moinian are due back in court June 16 to discuss underpinning No. 241, which requires Boston to have access to the foundation.
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RSM McGladrey, a division of accounting firm H&R block, has signed for a jumbo renewal and expansion at SL Green’s 1185 Avenue of the Americas.
The firm added an additional floor with 27,508 square feet, bringing its total there to 164,700 square feet.
The asking rent on the additional space was $95 a foot.
The tenant was repped by John Isaacs, who led a CB Richard Ellis team that also included Kevin Powderly and Lauren Crowley. Steve Durels negotiated in-house for Green.
Isaacs said RSM McGladrey needed more space partly because it recently acquired American Express Tax Services.
He said the new lease reflected the company’s “commitment to both 1185 and to Sixth Avenue.”