Media behemoth Viacom has a lease out for as much as 250,000 square feet at 345 Hudson Street, in the long-struggling commercial area of Soho’s Hudson Square.
Viacom, which counts MTV and Paramount Pictures among its many assets, is closing in on between 200,000 and 250,000 square feet, said Jason Pizer, the director of leasing at Trinity Real Estate, Hudson Square’s dominant landlord.
Although he said the lease has not been signed and that negotiations are still ongoing, he confirmed the lease-out and said a closed deal “is not far away.”
And just what does stand between a lease-out and a signed one? To Mr. Pizer, greedy owners.
“You know, with some owners, a better deal comes along and they’ll take that old lease and rip it up and start negotiating with a new party,” he said. “At Trinity, we like to think that once there’s a lease-out, we’re going to close the deal.”
Viacom has more than one million square feet in the Times Square area, including the painted glass façade splayed on shows like TRL every day. The company, with addresses sprawled all over Broadway, including 1515 Broadway, has been actively searching for new space, considering everything from renegotiating a deal in midtown to flocking to New Jersey.
If the Hudson Square deal is signed, it could be the first in a series of moves for Viacom, which has been looking for more breathable rents in a media-friendly submarket.
Meanwhile, an enormous lease with a powerhouse tenant could put the Hudson Square submarket more prominently on Manhattan’s commercial map. The vacancy rate for Class A space there is a staggeringly high 18 percent, according to a fourth-quarter 2006 report by brokerage Cushman & Wakefield. In the rest of Manhattan, vacancy rates are half that or less.
The Viacom deal would be the biggest under Carl Weisbrod’s watch as Trinity’s president, a watch that began in 2005.
One of the firm’s biggest deals came last month, when CBS Radio signed a lease for 75,000 square feet. (CBS Radio isn’t part of Viacom any longer, after a split between Viacom and the CBS Corporation.)
That deal came on the heels of WNYC Radio’s 2006 lease of 71,000 feet in 10 Hudson Square. And Clear Channel consolidated 121,000 square feet in a Rudin-controlled building just south of Canal Street, at 32 Avenue of the Americas, in December.
At a time when the media is shredding employees and redeploying space, cheap rents are a must.
When CBS Radio signed its 20-year deal for the 10th and 11th floors at 345 Hudson Street, the company agreed to pay rents of $34.50 a square foot for the first five years, $37.25 in the next five years, $40.75 for the next five, and $43.75 for the last five, according to a source familiar with that deal.
But not every deal has gone smoothly at 345 Hudson. Home Depot had been close to a lease there for 100,000 square feet, but the hardware chain got cold feet, and now that deal’s dead.
Representing Viacom in the deal is Michael Laginestra and Scott Gottlieb of CB Richard Ellis. They both declined to comment.
TAKE THAT, EQUINOX! TOWN SPORTS, which controls omnipresent gym New York Sports Club, has found its new headquarters.
Town Sports will move into a 28,000-square-foot home at 5 Penn Plaza, across the street from Madison Square Garden.
The rents are a considerable break from what the company pays now at Vornado-controlled 888 Seventh Avenue, said its leasing broker, Greg Taubin of Studley.
Mr. Taubin said that the Studley brokers were able to lock in rents in the mid-$30’s a foot at a building where rents have swelled to the high $40’s. Meanwhile, asking rents at the building Town Sports is fleeing are in the mid-$80’s.
In addition to Mr. Taubin, David Goldstein, Robert Graubard and Jason Perla worked on this deal. Mr. Goldstein, the executive vice president, like so many at Studley, is in Costa Rica this week, toasting to major leasing deals cut last year. Peter Turchin and Zachary Freeman of CBRE represented 5 Penn Plaza’s landlord, Stephen Haymes.
AS BROKERS MADE THEIR WAY THROUGH the boozy haze that was the Real Estate Board of New York’s annual banquet last week, each received a booklet with a seating chart.
Inside the 43-page booklet, there was precisely one ad, which was a sparkling artist’s rendition of the new 100 Park Avenue.
Of all the building’s new amenities—like a new glass façade—there was only one fact listed twice, on two separate pages: The building will come complete with 160,000 contiguous square feet.
It’s just more evidence of how much landlords are trying to get the word out about whatever bigger lumps of space they can pull together.
“There’s a substantial need for space,” said Alex Chudnoff, the Cushman & Wakefield leasing broker at 100 Park, “and there’s a very limited amount of it out there.”
So much so that Mr. Chudnoff anted up and said that 100 Park Avenue could have something closer to 400,000 square feet available.
Finding big blocks in midtown is an exacting challenge. That’s why brokers are itching to get the word out as soon as possible.
Other new blocks just getting out there: Vornado Real Estate has gone out of its way to tell brokers that a 400,000-square-foot block will be available at 909 Third Avenue, at 55th Street. The space won’t be available until 2009, but if it came out today, it would be one of the biggest blocks out there, so there really is never too early a time to market.
This need also spurred Tishman Speyer to unfurl early its ad campaign for 229 West 43rd Street. The space, the soon-to-be former New York Times headquarters, won’t be ready until next year, but the landlord’s just keeping tenants on call for the more than 746,000 feet that will become available.
The biggest midtown block out there now is at Sheldon Solow’s 380 Madison, which has more than 500,000 square feet marketed through CB Richard Ellis, according to CoStar.
Of course, with landlords eager to lock in long-term leases and tenants eager to get a deal now rather than pay even more later, both sides are looking for that big space—and quickly.
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