Michael Cohen

Mr. Cohen said the building was landmarked, so the expansion would be done in a way to avoid interferring with key components of the property. Most likely, he said, the expansion space would be constructed in an area of the property that wouldn’t be directly visible from the street.

“We would be redeveloping the top of the building to make something very special,” Mr. Cohen said.

The project would mirror other developments in the area in recent months and years.

In Midtown South’s western precincts near the High Line and in the Meatpacking District, a number of boutique commercial buildings have been built or are in the process of being raised. Closer to 28-46 West 23rd Street of course is 200 Fifth Avenue, an building that was acquired by L&L Holding Company in 2007 and renovated into an acclaimed office location in the neighborhood that has attracted a number of prominent tenants at previously unseen rents in the area.

28-46 West 23rd Street is best known as the home of the clothing label Ecko and also for its ground floor retail tenant The Home Depot. Ecko still has the lease for several floors in the property but shrunk its presence there during the recession when the company verged on bankruptcy. Since then, the building though has gained in popularity among tech tenants, a much-talked about burgeoning sector of the city’s economy and leasing market and one of the drivers of Midtown South’s popularity.

Last year the online marketing company Big Fuel Communications took about 40,000 square feet at the property and more recently Zaarly, another tech company, took space as well.

Mr. Cohen said it was too early to say how big the possible expansion will be, but hinted that it would be in the tens of thousands of square feet, not hundreds.

Dgeiger@Observer.com

How the Lehman-ade gets made.

As expected (we noted last week this would likely happen and soon), Lehman Brothers has agreed to unload its majority stake in the old Toy Building at 200 Fifth Avenue in a deal that values it at about $700 million. It is one of the biggest building sales of 2011 so far, and one of the most significant moves by the croaked investment bank's holding company in its campaign to liquidate its real estate. The buyer is a wing of JPMorgan.

Lehman and partner L&L Holding bought the building, the corporate home of Tiffany and of the Eataly restaurant and brewpub, from Joseph Chetrit for $480 million in mid-2007, at the real estate market's peak. But, as Eliot Brown of The Wall Street Journal notes, don't let the higher valuation on this latest deal fool you:

It's not clear, however, whether Lehman made or lost money on the investment because 200 Fifth's owners spent an enormous amount to upgrade the property to attract its high- profile tenants.

More here. L&L will remain as an owner and the building's manager.

"You know how in The Godfather III when Al Pacino says, 'I keep trying to leave but they just suck me back in?'" she said. "I feel like that with party planning."

The event—celebrating the completion of a two-and-a-half-year renovation at 200 Fifth, which will soon house media agency Grey Global Group, jeweler Tiffany & Co.'s headquarters, and chef Mario Batali's new restaurant/brewpub Eataly—was indeed fit for a Corleone. On a rooftop terrace in view of the Flatiron, with a live band playing bossa nova, guests sipped cocktails and nibbled spring rolls and tuna tartare, marveling at a cake designed to resemble the building.

David Levinson, Ms. Levinson's husband and the chairman of L&L Holding Company, which in 2007 bought 200 Fifth (formerly the International Toy Building), milled around the terrace, receiving congratulations. Wearing a navy suit and a Yankees World Series ring (Mr. Levinson owns a stake in the team), the real estate magnate exuded confidence.

"Two-hundred is a symbol of what we're capable of doing," he said. Asked to elaborate, he cited the building's Gold LEED certification and said, "I mean, you're the writer—look around. This is one of the finest buildings in the city."

With that, he slipped away to attend to his guests. John Travers, vice president of Structure Tone, which supervised construction at 200 Fifth, furrowed his brow, looking serious and sentimental, and said of Mr. Levinson and the building's rehabilitation, "Not many people are capable of pulling this off."

Forty-five minutes into the party, everyone got quiet. Mr. Levinson and Robert Lapidus, the CIO and other "L" of L&L, stood behind a microphone. Mr. Levinson announced that June 17, the day of the party, which also celebrated the 100^th anniversary of the building and the 10^th anniversary of L&L, had been proclaimed by official mayoral decree 200 Fifth Avenue Day. He offered thanks.

"There are really four L&Ls," Mr. Levinson said in his speech. "That's Carol Lapidus and Simone Levinson."

The crowd applauded the men's wives. Mr. Lapidus addressed the crowd.

"L&L is really a family business," he said. "You all are really an extension of that family."

The two men held a large knife and pretended to cut the 200 Fifth Avenue cake, smiling for cameras. Of course, the cake would not actually be eaten. Waiters arrived bearing trays of plates with slices from another, similar dessert.

Near the elevators inside, Ms. Levinson arranged the gift bags, which each contained not only a cookie with a photograph of one of L&L's properties ediblely printed on the front, but also a Tiffany & Co. key ring. Small cards in the bags read, "Thank you for playing a key role in our success." Ms. Levinson smiled at the pun.

"I couldn't help myself," she said.

walden@observer.com

A source tells us Tiffany's is consolidating from a monstrously inefficient 17 floors -- at 600 Madison, 555 Madison, and 680 Fifth Avenue -- into just four and a half.

The full release is below:

New York, NY... In what may well be one of the defining office deals in recent Manhattan history, Tiffany and Company, the world renowned jeweler, is moving its corporate headquarters to L&L Holding Company's 200 Fifth Avenue, across from Madison Square Park.

The company has leased 4 ½ floors comprising 260,000 square feet of space at the spectacularly revamped Class A office building that is celebrating its 100th birthday this year and for over seven decades functioned as the International Toy Center.

Tiffany is expected to relocate from 600 Madison Avenue to its new headquarters next spring.

For L&L Holding Company, the real estate firm headed by David W. Levinson and Robert Lapidus that recently completed a 14-month, $135 million historic renovation and makeover of the 14-story, 850,000 square foot property, 200 Fifth Avenue has emerged as a remarkable success story in one of New York's most challenging office markets. Last year, the Grey Group, the global communication giant, moved into its 370,000 square foot world headquarters at the building and Eataly, the world's largest Italian food and wine marketplace, teaming with Chef Mario Batali and Lidia and Joe Bastianich of the Batali-Bastianich (B&B) Hospitality Group, is currently building out over 44,000 square feet of boutique eateries, shopping and a rooftop mini brewery and restaurant that will open at 200 Fifth later this year.

Mitch Steir, Chairman and CEO of Studley, together with Studley Executive Vice Presidents Matt Barlow and David Goldstein and Senior Managing Director Greg Taubin represented Tiffany and Company in the long term leasing transaction. L&L Holding Company was represented in-house by David Berkey along with Howard Fiddle and Evan Haskell of CB Richard Ellis.

The recently completed makeover of 200 Fifth Avenue included a meticulous restoration of the building's landmarked façade, the installation of new state-of-the-art mechanical and electrical systems, a sunlight-filled, minimalist modern lobby and the creation of two exceptional tenant amenities - - a new outdoor, landscaped courtyard and beautiful roof deck with spectacular views of some of New York's most iconic landmarks.

The building- wide modernization, which has already received three awards from AIA, the Greater New York Construction User Council and The Flatiron/23rd Street BID, is expected to receive a Gold LEED certification.

Founded in 2000 by Messers, Levinson and Lapidus, Manhattan-based L&L Holding Company, LLC is a privately owned real estate investment company with a current portfolio in excess of 5.5 million square feet of office space primarily in Manhattan.

drubinstein@observer.com

Tell me how Eataly, Mario Batali's new food emporium, came to lease space at the former Toy Building at 200 Fifth Avenue? From what I understand, they were originally looking for a significantly smaller space.

Mr. Levinson: They were in the market for a while, looking to develop something in New York along the lines of what their financial partner had developed in Turin and Japan. They had an Italian connection, an operator that was there, and, I guess, somewhere along the line they hooked up with Mario Batali and Joe Bastianich to be the operator.

We had a lot of people looking at that retail space. A lot of them were event operations, because that was there. We had Cipriani 23. There were a lot of catering operations, and all the catering operations came to us and wanted that location, but that's not really what we wanted. We actually had a vision to animate the space, and we wanted some kind of restaurant. It was really quite amazing how this worked out, because we actually had a vision very similar to what Eataly is. We didn't think about a market where you could buy the food, but we thought about a multi-restaurant complex where someone would also exploit the roof.

Who else was looking at the space?

There were a couple of big-box retailers who looked at it. There's some appeal to that on the economic side, but it doesn't do anything for the building itself. It does something for the bottom line, the cash flow, but some of the great places to go ... I mean, think of the Time Warner Center. It creates value upstairs, for the residential there, for the hotel and the office space; and when you have an exciting venue that the tenants can go to eat, it adds a lot, and the roof space will be fantastic. They're going to put a brewery up there.

How have the negotiations been to bring Tiffany & Co. to the building?

We're comfortable, and it's in its final stages of negotiations. When we conceived of this building, we knew it was going to be solely for a tenant thinking about the future, a Gold LEED-certified building, a place where you wanted to go to change culture, where you want to be youthful, dynamic and a forward-thinking culture. We didn't think we would be competing with the typical glass box in midtown or downtown because there's plenty of that—small commodity space—but that a tenant would come here because he really wanted an impact on his culture. And, as I understand it, Tiffany also wanted to have a significant impact on that culture.

Were there others competing for that space?

Yes, there was. We were sort of limiting the amount of activity right at the moment because we think the leasing market is getting better, and will do better later on. But they were media and entertainment-type companies. I don't think there was one tenant that went through that building that it wasn't their first choice. But we held out. We wanted much higher rent than most every place else.

What kind of rent are we talking about?

More than what you would expect in midtown and certainly the highest rents achieved in the midtown south market. And we'll maintain that. This is a premier, one-of-a-kind building, and it deserves to have that kind of recognition.

Will you have to build out that space?

No, they're going to do it. They're going to build their space. We did a major alteration on the building and transformed the building with the gardens in the center and the glass curtain wall and the Gold LEED certification. As far as the tenants, that's their responsibility, and we just kind of cooperate.

How did the so-called Great Recession affect you?

It did a couple of things. One, if you were in the business and had assets—what we call legacy assets—the value of those assets in the initial phase of this recession was seriously impaired. Rents have gone down. Cap rates, which helps create the value of the building, not only went up, they were almost nonexistent. It was very, very difficult. So, fortunately for us, we're not a public company, we're not a fund.

L&L is a partner with Lehman Brothers on several properties. How did the company's bankruptcy affect the company?

Well, it certainly impacted us because they were partners of ours. They were not lenders, but they were partners of ours-and are today-and partners of ours in some major properties. For the first couple of months after the Lehman bankruptcy, it was very difficult to deal with them and communicate with them because they were sort of just pulling the bodies out of the wreckage.

But I would tell you that in two cases we have been dealing with Lehman, it's been very good. It's been very fortunate that the Lehman estate has done everything they were supposed to do as a partner, and, over time, it's gotten much easier to work with them. Now it's sort of settled down to normalcy. Obviously, there are huge challenges with them, but in our partnerships with them, it's been quite good.

I understand that you invested in gold.

Yes. The bullion purchase was back in those moments where in the recession we didn't know how far things were going to go. We called it bullets and bullion-B&B. [Editor's note: Mr. Levinson furnished a cell phone picture of three bars of gold bullion.] Each one of those bars is 27 pounds.

How many bars of those do you have?

Not enough.

You have a close relationship with News Corp. head Rupert Murdoch. Care to comment on The Wall Street Journal's new metro section, which hit the streets Monday?

The Wall Street Journal section is going to be exciting. The transformation of The Journal at the time Rupert bought it has been terrific. It's evident, if you look at it, when you see the numbers. More and more people read it, so it's great to see that happen. Having a New York section is really exciting. They put a lot of money into it.

You have a 10 percent stake in the New York Yankees. Care to handicap the season?

Number 28 for sure. This will be another championship for us.

I presume you're a Yankees fan, right?

To be an owner, you have to be. It's a requirement. In fact, I just filled out the papers for my ring size so I'm excited about that.

jsederstrom@observer.com

Landlord L&L Holding Company, which just got legal permission to evict Cipriani, has had a number of prominent visitors lately, according to David Berkey, the firm’s executive vice president.

“Some of the major users mentioned in your July 15 article have been through the building on more than one occasion and expressed definitive interest in joining Grey Global,” Mr. Berkey said, referring to the article in which we listed the handful of firms looking for more than 150,000 square feet in today’s Manhattan market: NBC Universal; HSBC Bank; law firms Fitzpatrick Cella Harper & Scinto, Paul Weiss Rifkind, Wharton & Garrison, and Orrick, Herrington & Sutcliffe; and banks Allianz, Natixis, and WestLB.

Grey Global is the advertising firm that claimed 370,000 of 200 Fifth’s 800,000 square feet last year; it has yet to move in.

Mr. Berkey said that the building, which is undergoing a $130 million overhaul that includes 17 new elevators, new bathrooms and more than 600 new windows, will be ready for occupancy by next year.

The asking rent is around $85 a square foot.

drubinstein@observer.com