Thank God for bankruptcy! By declaring Chapter 11, General Motors has been allowed to officially reject its 120,000-square-foot lease at the sublimely modernist 601 Lexington Avenue (better, if formerly, known as the Citigroup Center).
Mort Zuckerman‘s Boston Properties, which owns the stunning rascacielos, revealed the news in its second quarter earnings report:
On June 1, 2009, General Motors Corporation filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. At that time, the Company leased approximately 120,000 square feet of office space to General Motors Corporation at 601 Lexington Avenue (formerly known as Citigroup Center). Rent commencement for the lease at 601 Lexington Avenue began on June 1, 2009 and the lease was to expire on May 31, 2019. However, on June 12, 2009, General Motors Corporation rejected the lease in bankruptcy effective as of June 30, 2009. The contribution from this lease, on a contractual basis, from July 1, 2009 through December 31, 2009, was projected to be approximately $6.6 million.
That’s a bummer for Boston Properties, which we’re assuming got a pretty nice rent for the space, as the lease was signed during the boom years. If it’s any consolation, this means that the GM Building, the skyscraper at the corner of Fifth Avenue and 59th Street, also controlled by Boston Properties, will remain the New York headquarters of General Motors (the tower’s original landlord) for the foreseeable future.
GM’s lease for 101,000 square feet there expires on March 31, 2010. And, as The Observer earlier reported, the firm is in negotiations to renew its lease there.