Some buildings have a bunch of office floors available.
Some landlords (like Rudin Management) even have a whole building to fill. But Aby Rosen’s RFR is in a rare position — it has two entire vacant properties on the rental market and 75 percent of a third.
The buildings are 285 Madison Ave. at East 40th Street, the former Y&R tower which RFR bought with partner Greek Oak Real Estate last year for $190 million; 350 Madison Ave. near East 45th, which it bought in March for $261.5 million; and 90 Fifth Ave., a building which Rosen had planned to sell until longtime tenant Forbes defaulted on its lease, giving him the chance to “re-imagine” it.
Both 285 Madison (530,000 square feet) and 90 Fifth (137,000 square feet) are vacant, while about 75 percent of 350 Madison’s 400,000 feet are up for grabs — around 967,000 square feet.
Rosen sees the simultaneous availabilities as a great opportunity.
“We consider it an advantage,” Rosen said, giving him the chance to “re-imagine” the pre-war buildings with nearly $150 million in total capital improvements. They’re not only to modernize the properties with commonplace lobby and infrastructure upgrades, but to adapt floor plates to tap into the swelling market for more flexible office space.
Rosen’s faith in the three addresses lies in the growth of tech, media, entertainment and creative firms proliferating in Midtown South and increasingly drawn to Midtown itself.
“Areas were once so defined, and you don’t have that any more,” he said.
“We are putting our footprint on them,” Rosen said. “The market is hot for the tech sector, but the space was tired and old.”
Rosen likens plans for the three locations to the earlier situation at the Seagram Building and Lever House, landmarks which are part of RFR’s multimillion square-foot portfolio.
At both, high vacancies at the time RFR bought them made possible ambitious improvements, especially at Lever House, where Rosen installed a restaurant and an outdoor sculpture garden.
At 285 Madison — site of the tragic Y&R elevator accident two years ago — RFR hopes to establish “a community in a building” with amenities including a tenants’ restaurant, bicycle storage and flexible floor plans.
The brick-and-limestone structure with classic setbacks ornamented with eagles and gargoyles had fallen into near-decay. Its restoration is on track to welcome tenants by the end of the first quarter.
Although column-free floors are in demand by financial services and law firms, that isn’t necessarily the case for creative types, for whom structural pillars lend a space character the way beams and moldings do for prewar apartments.
The sunlit 11th floor of 285 Madison, now being used to show brokers different possibilities for space use, displays a New Age-y wheat patch, a ping-pong table and Andy Warhol artworks from Rosen’s collection.
Rosen says asking rents at 350 Madison and 90 Fifth will be “very equal, in the mid- to high $70s” a square foot.” At 285 Madison, they’ll run $65-70 on lower floors and up to $80 on the top three floors.
A CBRE team led by Mary Ann Tighe is fielding offers for 285 Madison. At 350 Madison it’s a CBRE team led by Peter Turchin, and RFR is handling leasing for 90 Fifth Ave. in-house.