‘Renewal’ year’s magic word, as litigious lock-ins dominated uncertain annum for the Manhattan office market.
‘Renewal’ Year’s Magic Word; Litigious Lock-Ins Dominated Uncertain Annum
Well, thank God for the law firms, eh? In 2009, the white shoe firms (or just plain black shoe, as is increasingly the case) accounted for more than one-fourth of Manhattan's top 20 leases of 2009. After law, no industry comes close.
Same for renewals versus new leases. Fourteen of the 20 leases herein were renewals or renewals plus expansions, including the top three. Closely watched hunts like those of law firm Paul, Weiss and insurance giant New York Life at 1285 Avenue of the Americas and 63 Madison, respectively, ended anticlimatically in larger-scale, long-term re-ups.
What do both salient facts of the list-the share of law firms and the preponderance of renewals-say about the office-leasing market in 2009? Exactly what you would think: that even higher-end tenants by and large hustled to lock in Great Recession rents and incentives.
A few notes on the list: Effort was made to be as comprehensive as possible, including with naming all brokers involved in the leases. Top 20 lists from CB Richard Ellis, Cushman & Wakefield, Newmark Knight Frank and Cassidy Turley (the former Colliers ABR) were consulted; other brokerages' lists were solicited; and media clips were reviewed. Only leases finalized in 2009 were included, and not any that were, for instance, negotiated during the year and finalized in early 2010.
1. 1285 Avenue of the Americas
1285 Avenue of the Americas
Paul, Weiss, Rifkind, Wharton & Garrison LLP
JPMorgan Securities and Lend Lease Real Estate Investments
After riveting the real estate world with a years-long search that included a dalliance with a now-defunct Vornado plan to build a futuristic tower over the Port Authority, Paul, Weiss chose the vanilla and stayed put.
Brokers involved: Barry Gosin and Moshe Sukenik of Newmark Knight Frank; Peter Riguardi and John Ryan III of Jones Lang LaSalle
2. 63 Madison Avenue
63 Madison Avenue
New York Life
George Comfort & Sons and Loeb Partne rs Realty
The second-largest lease of 2009, like the first, was a renewal. This one wasn't much of a shocker, given the building's proximity to the insurance company's home office at 51 Madison and to Madison Square Park, which is essentially New York Life's campus quad.
Brokers involved: A. Mitti Liebersohn and Paul N. Glickman of Cushman & Wakefield; Peter S. Duncan and Matt Coudert of George Comfort & Sons
3. 1230 Avenue of the Americas
1230 Avenue of the Americas
Simon & Schuster, Inc.
Again, another renewal. Again, not much of a surprise. Word has it that Simon & Schuster, member of the flailing publishing industry, renewed early so that it could lock in low Great Recession rates.
Brokers involved: Michael R. Laginestra, Andrew Sussman, Scott Gottlieb and Michael Wellen of CB Richard Ellis; Calvin Farley and Ted Koltis of Tishman Speyer
4. 40 Worth Street
40 Worth Street
Gap Stores, Inc.
Newmark Knight Frank
The largest new lease of the year was a smashing success for 40 Worth Street, and likely a smashing success for Gap, which will be able to consolidate its now disparate offices, and ditch stuffy midtown for hip Tribeca.
Brokers involved: Eric Deutsch, Ken Meyerson, Kevin Powderly, Jason Pollen, Jim Robbins, Harly Stevens and Richard Levine of CB Richard Ellis; Jeffrey Gural, Roy Lapidus, Daniel Segal, Eric Gural and Brian Steinwurtzel of Newmark Knight Frank
5. 200 Park Avenue
200 Park Avenue
Gibson, Dunn & Crutcher
This was a dull denouement to a thrilling office hunt. Recall: Gibson, Dunn was supposed to be a marquee tenant in Boston Properties' still unbuilt 250 West 55th Street, until anchor tenant Proskauer Rose backed out and the project was put on hold. Oh, what could have been!
Brokers involved: Lewis Miller, Andrew Sussman, Ramneek Rikhy and Stephen Siegel of CB Richard Ellis; Megan Sheehan and Calvin Farley of Tishman Speyer
6. 51 West 52nd Street
51 West 52nd Street
Wachtell, Lipton, Rosen & Katz
Viacom International Inc.
Yet further proof that law firms were behind much of the big leasing activity in the otherwise stagnant 2009 (what's that say about society at large?), and that "renewal" was the word of the day.
Brokers involved: Mitchell Steir, Howard Nottingham and Stan Towne of Studley; Michael R. Laginestra, Scott Gottlieb, Andrew Sussman and Michael Wellen of CB Richard Ellis
7. 555 West 57th Street
555 West 57th Street
BMW Financial Services N.A., LLC
This retail and office space renewal keeps SL Green's far West Side building fully occupied, and allows BMW to remain within its stunning 11th Avenue storefront and within spitting distance of its midtown clientele.
Brokers involved: Steven M. Durels of SL Green; Michael R. Laginestra, Michael Geoghegan, Joan Meixner and Matthew Settipane of CB Richard Ellis
8. 180 Maiden Lane
180 Maiden Lane
Stroock & Stroock & Lavan
The Moinian Group
This deal reportedly locks Stroock & Stroock into this downtown building until 2023.
Brokers involved: Michael Monahan, Stephen Siegel, Lewis Miller, Andrew Sussman, Ramneek Rikhy, Mark Ravesloot and Scott Sloves of CB Richard Ellis; Joe Moinian, Harry Dreizen and Steve Bederman of the Moinian Group
9. 51 West 52nd Street
51 West 52nd Street
Orrick, Herrington & Sutcliffe LLP
The Viacom International Inc.
Capping a seemingly epic office hunt that brought the law firm inches away from signing at Citigroup Center, Orrick took one of the year's few big new leases. The law firm had its reasons. Among them: It's taking space that UBS paid the landlord to vacate early. That money is being plowed into the law firm's tenant improvement allowance.
Brokers involved: Barry Gosin, Moshe Sukenik and John Lizzul of Newmark Knight Frank; Peter Riguardi, Frank Doyle, Barbara Winter and Andrew Flint of Jones Lang LaSalle
10. 650 Madison Avenue
650 Madison Avenue
Polo Ralph Lauren Corporation
Carlyle Investment Management, LLC
Ashkenazy Acquisition Corporation
One of the few leases, big or small, in the spring of '09, this renewal was good news for landlords Carlyle and Ashkenazy, which bought the glassy tower late-boom for $680 million.
Brokers involved: Mitchell Steir, David Goldstein, Matthew Barlow and Michael Leff of Studley; Alexander Chudnoff, Jared Horowitz, Mitchell Konsker and Paul N. Glickman of Cushman & Wakefield
11. 25 Broadway
Claremont Preparatory School
Claremont signed a 20-year lease here after a deal at the troubled 100 Church-then owned by the Sapirs and now controlled by SL Green-fell through. The Cunard Lines Building will house middle- and high-school classes starting this fall.
Brokers involved: Barry Gosin and Howard Kesseler of Newmark Knight Frank; Bruce Surry, Gary Kamenetsky, Richard Levine and Stephen Siegel of CB Richard Ellis
12. 1633 Broadway
Showtime Networks Inc.
This deal was a boon for landlord Paramount Group, locking the cable channel in for another 15 years.
Brokers involved: Michael R. Laginestra, Scott Gottlieb, Andrew Sussman, Michael Wellen and Justin Royce of CB Richard Ellis
13. 55 Water Street
55 Water Street
Depository Trust & Clearing Corporation
New Water Street Corp. and Retirement Systems of Alabama
This lease was something of a Pyrrhic victory for New York. Though Depository Trust did decide to keep its headquarters Manhattan-side, it also decided to move 1,600 back-office jobs to-egad!-New Jersey.
Brokers included: Charles Borrok and Philip Weiss of Cushman & Wakefield; Howard Fiddle, Mary Ann Tighe and Evan Haskell of CB Richard Ellis
14. 555 West 57th Street
555 West 57th Street
City University of New York (CUNY)
Another big renewal at SL Green's far West Side tower.
15. 1 World Trade Center
1 World Trade Center
The Port Authority of New York and New Jersey
China Center, the one and only private tenant to sign up for space at the building formerly known as the Freedom Tower, plans to use the 64th through 69th floors as a business and cultural center.
Brokers involved: Peter Riguardi, John Ryan III and Paul Mas of Jones Lang LaSalle
16. 731 Lexington Avenue
731 Lexington Avenue
Vornado Realty Trust
In this renewal and expansion, Bloomberg L.P. subleased Citigroup's remaining space at the Vornado building, adding to the 700,000-square-feet the media company already controls there.
Brokers involved: Craig Reicher, Howard Fiddle, Christopher Mansfield, Christopher Corrinet and Mary Ann Tighe of CB Richard Ellis; and Paul N. Glickman of Cushman & Wakefield
17. 1251 Avenue of the Americas
1251 Avenue of The Americas
Mizuho Corporate Bank, Ltd.
Mitsui Fudosan America
Mizuho, searching for space at buildings like 7 World Trade and 11 Times Square in an otherwise dead market, was a tenant to watch, until it decided to just stay put.
Brokers involved: Frederick Fackelmayer, Robert Flippin and Doug Lehman of CB Richard Ellis; David Falk and Peter Shimkin of Newmark Knight Frank
18. 1271 Avenue of the Americas
1271 Avenue of The Americas
Lehman Brothers Holdings Inc.
Rockefeller Group Development Corp.
This new lease is small recompense for the way Lehman Brothers' demise rattled and helped empty the real estate market, but it was something.
Brokers involved: Michael Geoghegan, Andrew Sussman, Michael Wellen and Robert Alexander of CB Richard Ellis; Mitchell Steir, Howard Nottingham and Matthew Barlow of Studley
19. 345 Park Avenue
345 Park Avenue
Loeb & Loeb
Rudin Management Company
This 20-year direct lease transformed Loeb & Loeb from a Bristol Meyers subtenant to a direct Rudin tenant, and it gave the law firm an additional 36,000 square feet.
Brokers involved: Brian Gell, Lewis Miller, Kenneth Rapp, Michael Wellen and Lauren Crowley of CB Richard Ellis; and Tom Keating of Rudin Management
20. 645 Fifth Avenue
645 Fifth Avenue
National Basketball Association (N.B.A.)
Olympic Tower Associates
Yet another boring end to a once titillating, two-year office hunt that took the NBA to gaping office spaces around the city. But good news for the landlord.
Brokers involved: Barry Gosin and Moshe Sukenik of Newmark Knight Frank; Corey Borg, Harry Seherr-Thoss, Mark Jaccom, Robert Freedman, Richard Plehn Sr. and Christina Plakopita of Colliers International (formerly FirstService Williams)