AS banks contract, vacancies soar and rents plummet, any evidence of residual market strength is welcome.
We got word of such a morsel over the Martin Luther King Jr. Day holiday weekend – but closed offices and traveling real-estate executives made it hard to pin down every detail.
It comes down to this: International law firm Kirkland & Ellis has worked out a complicated, 120,000 square-foot expansion at Boston Properties’ Citigroup Center, which is soon to be renamed simply 153 E. 53rd St.
The firm has had a presence in the tower since 1993. As of last month, it had grown to 280,000 square feet on nine floors, according to online databases. Now they’re adding four more – floors 32 to 35.
From what we’ve heard, Kirkland & Ellis will move into floors 34 and 35 immediately. The other two are currently occupied by real estate brokerage Jones Lang LaSalle, whose dealmaker Frank Doyle, the landlord’s agent for the tower, had a hand in the transaction.
As part of the deal, Jones Lang LaSalle will apparently sublease its two floors from Kirkland & Ellis rather than lease them directly through Boston. Kirkland & Ellis will move into the Jones Lang LaSalle floors over time.
Kirkland & Ellis’ broker is Studley Chairman and CEO Mitchell Steir. Neither Steir, Doyle, nor Boston’s Andrew Levin, who also was said to have worked on the deal, could be reached yesterday.
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Law firms’ expansions seem to be the fading market’s last gasp.
A week ago, the New York Observer reported another biggie – Sonnenschein, Nath & Rosenthal’s move to Brookfield’s 2 World Financial Center, where it’s taken 135,000 square feet of former Merrill Lynch digs and doubled its Manhattan space.
But a question mark hangs over a project everyone wants to see completed: Boston Properties’ planned development at 125 W. 55th St. on Eighth Avenue.
After months of excavation and demolition for a 1 million square- foot office tower – with a strong retail presence – a key deal has yet to be done.
Law firm Gibson, Dunn & Crutcher signed a lease for 200,000 square feet, but Proskauer Rose and Boston have yet to nail down a long-discussed lease for about 400,000 feet.
The Gibson deal was inked for around $110 a square foot “plus bumps-up over time” when the market was at its peak. “How they wish they’d waited,” a source told us.
The buzz has been that Proskauer no longer has an incentive to move out of its headquarters at 1585 Broadway, where Morgan Stanley was offering the lawyers a cash sweetener to leave before its lease expiration.
But Morgan no longer needs extra space for itself on Broadway and now market watchers wonder if Boston will go ahead with the new building if the Proskauer deal falls apart as a result.
Meanwhile, on the same block, developer Harry Gross has filed plans with the city to demolish the small buildings he owns at the northwest corner of Broadway and 54th Street.
Gross recently emptied the buildings of retail tenants and seems poised to build a Marri ott-branded hotel there.
Exactly when that project might rise and how it’s to be financed will be one of many mysteries to be unraveled in a fraught 2009. steve.cuozzo@nypost.com