Real Estate

Best of frenemies at 4 TS

A unit of the consulting firm that put out a mostly complimentary audit of the Port Authority has been hired by the agency to help it find tenants to replace Condé Nast at 4 Times Square.

The PA tapped Navigant Capital Advisors — the corporate finance arm of Navigant Consulting — to “evaluate strategic alternatives” for the publisher’s 840,000 square feet.

Four Times Square is owned by the Durst Organization.

Under a deal worked out nearly two years ago, the PA is on the hook for the rent on the space when the publisher moves to 1 World Trade Center in 2015.

The rent due between then and the lease’s April 2019 expiration is about $214 million.

The eye-opening arrangement with Navigant doesn’t mean the firm will act as the PA’s broker but rather, an insider said, will “advise the PA in terms of running the process and evaluate proposals” that will come in through brokers — a role similar to that of an investment bank.

Although Navigant won’t get a commission, it will earn a hefty fee “in the high six figures or low seven figures,” a well-positioned source said.

Under the complex deal to let Condé Nast anchor 1 WTC, the PA agreed to pick up the cost of the remaining rent on Condé’s Times Square lease.

The space stretches over 19 floors including the iconic, Frank Gehry-designed cafeteria.

Interest in the space is likely to be high: It’s a Class-A asset in the tower that cemented the “new” Times Square’s role as a commercial center for media, banks and law firms.

But if the PA hasn’t found a tenant to sublease Condé’s floors, the PA must reimburse the publisher for its rent payments to Durst.

Navigant is expected to send a letter today to top commercial brokers apprising them of its role, saying it has been “retained to evaluate strategic alternatives” for the Condé floors.

It says the PA “will consider a variety of transaction structures,” and “the focus will be on proposals that transfer the rights and obligations of the Condé Nast lease through assignment, lease transfer or other economic exchange.”

The letter also says the 4 TS rent into 2019 will be a below-market $58.86 per square foot, rising to $61.60 only in the final year, and 10-year extension rights beyond April 2019 “at discount to market.”

Word of Navigant’s role was a hot potato yesterday. PA Chairman Patrick Foye wouldn’t comment other than to confirm a letter was going out to brokers this week.

Douglas Durst declined to comment. Prominent independent brokers didn’t want their names attached to the story — including one who said Navigant’s involvement “makes no sense.”

The same broker questioned why the PA needed a middleman when it could simply hire a leasing agent — as it did at 1 WTC, where it tapped Cushman & Wakefield even before it teamed up there with Durst.

And why wouldn’t Durst himself, who built 4 Times Square, be the best possible “adviser” to the PA?

Another broker speculated that if the PA ended up losing money on its 4 TS obligation — which was negotiated under previous PA leaders — Navigant’s involvement would offer a way of saying the agency’s new chiefs had gotten the best possible deal.

Another dealmaker suggested it might not be in Durst’s interest to commit to sublease or lease-extension terms for Condé’s Times Square space right now at such low rents, since the market might be stronger in a few years.

Last winter, Navigant Consulting and Rothschild Inc. scathingly called the PA “dysfunctional” in an audit commissioned by Gov. Andy Cuomo and New Jersey Gov. Chris Christie.

A follow-up audit this month, while still finding problems, praised the agency’s “revitalized leadership,” a point noted with pleasure by PA chairman David Samson. It even found controversial toll hikes, which were condemned last winter, to be necessary.

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Perry Ellis International is consolidating and expanding its women’s brands at Savitt Partners’ 530 Seventh Ave.

Perry Ellis is taking 39,000 square feet of office and showroom space in a deal including extensions and conversions of two subleases to direct, plus a new, 18,500 square-foot direct lease for its Rafaella division.

The Rafaella unit will move from 1411 Broadway.

The new lease was negotiated for the building owners by Bob Savitt, Brian Neugeboren and Marc Schoen; Jones Lang LaSalle’s Robert Martin, Matt Astrachan, Alex Chudnoff and Brad Lane repped the tenant.

Perry Ellis also recently moved its menswear division from several locations into 1120 Sixth Ave.

“As they consolidated their menswear at another address, this lets them consolidate their women’s business and finishes their requirements,” Astrachan said.

Bob Savitt, whose family has owned the building at 39th Street since the 1920s, said the 500,000 square-foot property is 100 percent leased.

Unlike other addresses along Fashion District avenues that have increasingly taken in traditional office tenants, 530 Seventh is entirely leased to fashion-industry firms, including Max Mara, New Balance and Asics.

Asking rents range from $53 a square foot in the base to $65 in tower floors.

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Temco Service Industries, an international provider of building maintenance and security services, is moving its corporate and divisional offices from One Park Ave. to 417 Fifth Ave. at 38th Street. The firm has signed for 22,000 square feet.

Cushman & Wakefield’s David Stockel, Peter Van Duyne, John Picco and Andrew Weisz repped the tenant; Murray Hill Properties’ Roxana Girand repped the landlord in-house.