Goldman Sachs initially leased 77 Water Street in the early 2000s, but the banking institution later reconsidered the lease soon after and never moved in. Mr. D’Avanzo said he couldn’t discuss Goldman because the firm remains one of his clients, but brokers familiar with the building told The Commercial Observer that the space had been toggling on and off the market for years.
It wasn’t until Goldman hired the C&W team in 2009 that deals at the property got going. Despite the fact that the economy was in a serious downturn and leasing in the city ground to a near standstill that year, the C&W team began signing tenants. By the end of that year, the group had finished deals amounting to hundreds of thousands of square feet with big-name tenants including AT&T, the engineering company Arup, the law firm Lewis Brisbois Bisgaard & Smith and the insurer OneBeacon Insurance Group.
“Our strategy has always been to be aggressive in pursuing deals,” Mr. D’Avanzo said.
Mr. D’Avanzo wouldn’t discuss rents or concession packages at the property, but several sources said that Goldman officials demonstrated uncommon savvy in judging the market conditions at the time and cooked up economics that would spur transactions at the property despite the daunting headwinds. The company gave the C&W group leeway to offer rents in the $30s per square foot, a competitive rate, and generous incentive packages such as work allowances that would allow tenants to build out their offices. Goldman also invested more than $20 million in the property, money that was used in part to correct what was widely regarded as its principal weakness: a diminutive lobby.
“We have a beautiful lobby in the property now,” Mr. D’Avanzo said.
Mr. D’Avanzo’s team did its part, recruiting brand name space takers with sterling credit.
It is the practice of some leasing teams to be especially choosy with what deals they do for the final slivers of a large space that has mostly been leased. After filling much of the downtown office building 7 World Trade Center, for instance, developer Larry Silverstein waited years before signing deals for the building’s uppermost floors to hold out for very high rents.
Mr. D’Avanzo and his team knew they didn’t have that luxury at 77 Water Street. Because the space is being offered as a sublease, rather than directly from Kaufman, the landlord—which, depending on the floor, expires in either 2018 or 2021—the pressure was on from the start. Because large tenants typically sign leases for long periods of time, a big block of space with a dwindling term would become only less valuable and harder to fill as time went by.