The 544,000-square-foot headquarters of the NYMEX, the New York Mercantile Exchange, was built along the Hudson River in Battery Park City in 1996. The 15-story building at 1 North End Ave. (pictured) is subject to a ground lease with the Battery Park City Authority through 2069.
As electronic trading increased, however, NYMEX was purchased by the Chicago-based CME Group, the parent company of the Chicago Board of Trade.
Last year, CME and their Chicago-based real estate advisor, Holly Duran Real Estate Partners, hired James D. Kuhn, Jennifer Schwartzman and Neil Goldmacher of Newmark Grubb Knight Frank (NGKF) to sell the building and allow them to lease back less space.
First, the brokers structured a two-year lease back deal that worked for NYMEX and would attract a high price. This would give the buyers cash flow while adding a floor slab to the trading floor, creating another roughly 35,000-square-foot floor that could be leased for market rents. While permitted under their lease, they still needed to get BPCA approvals.
The most logical buyer was Brookfield Office Properties, which owns and operates the other office buildings in Battery Park City. To get the best price, the NGKF team had to convince other bidders that they had an equal opportunity. As the public company is usually a conservative bidder, to shake them up to raise their bid, the brokers left Brookfield out of the second round of bidding.
In the end, Brookfield stepped up with a bid of $200 million, or $368 per square foot. NYMEX will lease back 449,000 square feet for two years and then restack into 222,000 square feet on the lower eight floors. This lease goes to Dec. 31, 2028, and has two five-year options and options for two more floors.