Savanna is adding two loft-style Chelsea office buildings to its growing collection — 245 and 249 W. 17th St.
The aggressive real estate private-equity and asset management firm just bought the properties from the Pressman family for a price not yet disclosed. The buildings have a combined 284,000 square feet.
Built in 1902 as a warehouse and wagon house for the Siegel Cooper department store, 249 W. 17th’s six stories have 145,000 square feet. Adjacent 245 W. 17th has around the same square footage over 12 floors. The buildings also have a combined retail footprint of around 40,000 square feet.
Savanna plans to spend $21 million on capital improvements. Vice-president Kevin Hoo said the plan will “preserve and enhance the loft-style aesthetic” while bringing both addresses into the modern age.
Eastern Consolidated’s Brian Ezratty was the transaction’s sole broker. Newmark Grubb Knight Frank’s David Falk, Peter Shimkin, Danny Levine and Nick Berger will handle office leasing; the same firm’s Jeff Roseman and Amy Zhen will market the retail.
The purchase brings Savanna’s Manhattan portfolio to more than 4 million square feet.
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As usual, “trophy” properties continue to outperform the rest of the leasing market. Jones Lang LaSalle’s latest “Skyline Review” shows Plaza District “trophies” are especially strong, with average asking rent of $95.66 per square foot.
Overall, JLL found Manhattan vacancy for all building classes stable at 10.4 percent.
It noted that financial-services employment in Manhattan is down 5.6 percent since 2008 and legal services are down 9.1 percent, continuing to be a drag on market momentum.
But we were more intrigued by what the report had to say, or didn’t say, on the development front. JLL states that Extell’s One Hudson Yards will “like[ly] be the first new project developed in the Hudson Yards redevelopment zone.”
As we first reported last spring, that’s Gary Barnett’s proposed 1 million-square-foot tower on 11th Avenue between 34th and 35th streets — which is in the Hudson Yards district but not at the rail yards site with which the Hudson Yards name is synonymous in many minds.
But why, in the JLL report, was there no mention at all of Related Cos.’ 2 million-square foot Coach tower, which will be the first to rise at the 26-acre rail site and is supposed to break ground any day?
A rep for JLL explained the firm believed the Coach project wouldn’t be done until 2017 — two years later than Related must deliver the building to Coach and possibly other tenants, including L’Oreal.
Now, JLL has a selfish interest in ignoring Related: as JLL’s rep acknowledged, it’s the leasing agent for Extell’s project (CBRE has the nod from Related). But even allowing for the competition, cutting Related out of a report widely distributed to brokers and journalists struck us as less than fair play — and dumb, given the Coach project’s imposing public profile.
Still, the actual launch date for Related’s tower remains unknown.
A few weeks ago we wrote that Related wanted “amendments” in its ground lease deal for the yards with the MTA, which has yet to close — two years after terms were agreed to.
It wasn’t hearsay — MTA Chairman Joseph Lhota said on the record that Related “has approached the MTA to amend the existing deal,” despite Related officials saying they weren’t looking to change anything.
It matters big-time because Related can’t start work in earnest on its first Hudson Yards skyscraper until it closes on the ground lease.
A few days later, I bumped into Related Chairman Stephen M. Ross at Time Warner Center’s Porter House restaurant. Ross — politely, as has been his style since he was the subject of my first-ever Realty Check column on Nov. 10, 1999 — averred that I was “stirring things up” and there was nothing the least bit amiss.
He wouldn’t elaborate. Nor would the MTA. Everyone hopes the long-awaited Coach skyscraper comes out of the ground immediately.
But whatever’s up between the developer and the agency, Superstorm Sandy did it no favors as the MTA continues its heroic campaign to get the city’s transit fully up and running.
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We’re a bit skeptical, but major industry figures sounded optimistic yesterday about the double-barrel impact of the nation’s looming “fiscal cliff” on Jan. 1 and disruption to the industry by Sandy.
Asked if he was worried, Douglas Durst said, “I believe that as the dust settles, it will become clear to our elected representatives that that’s what they’re supposed to do — represent us. And they’ll work together to help the country and the people who live and work there.
“That’s a way of expressing optimism,” he said. “I believe the commercial market will return in the spring.”
Durst, meanwhile, was coping with damage to small apartment buildings he owns on Front Street, which he said were “basically destroyed” after being inundated by 7 feet of water.
Jones Lang LaSalle power-broker Mitch Konsker, the leasing agent for Savanna’s 100 Wall St. (temporarily closed), said he and prospective tenants were still “trading papers. It hasn’t slowed up, and we haven’t seen a downturn regarding deals in the hopper.”
Konsker added that he hadn’t seen “anyone pulling out on the landlord or tenant side” anywhere in the city over fears about what might happen in January if the Bush-era tax cuts are allowed to expire.
On a slightly optimistic note, JLL said the number of office buildings still out of commission downtown had fallen to 28.8 percent — much higher than the 10-15 percent JLL New York President Peter Riguardi thought was the case early last week as we reported, but better than the 35 percent the firm estimated by week’s end.