Construction Outlook 2012
Plenty of statistics point to the need for new office construction in Manhattan, and the city’s aging building stock isn’t least among them.
Indeed, no meaningful addition to the city’s roughly 400 million square feet of commercial space has been added to the skyline in two decades, raising questions as to whether it could face a shortage in the coming years, a situation that has pressured rental spikes in the past. For now, however, amid what appears to be at least a hiccup in leasing during the last quarter of 2011 and the opening quarter of this year—not to mention lingering concerns about the health of the economy—only the most intrepid developers have gone into the ground with projects.
It was lunchtime at Casa Lever, the high-end restaurant in the iconic Lever House, and Richard Baxter was on his BlackBerry negotiating.
It was a busy year for Mr. Baxter and his colleagues at Jones Lang LaSalle. His four-man team comprised some of the city’s most prominent brokers of large-scale commercial office buildings, and as the Manhattan sales market’s post-recessionary thaw continues, Mr. Baxter estimated that the group had tallied an impressive $1.3 billion in deals this year.
Three days before Christmas, however, it wasn’t one particular skyscraper Mr. Baxter was bargaining over from his plum seat at Casa Lever. In a year-end rush, his group had loose ends to tie up, deals to close and transactions still in the works. And so, on this particular Thursday amid a bustling lunch crowd, Mr. Baxter was not negotiating with a buyer or a building owner, but rather one of his own assistants, whom he was asking to stay late to receive critical documents and to help get the team through the rest of the day.
It may have been the kind of problem every tenant wishes it had, but for Wasserman Media Group it was a problem nonetheless.
Only a few months had elapsed since the firm had signed on at the start of the year to take roughly 7,000 square feet on the fourth floor of the midtown office tower 444 Madison Avenue, and already it was clear to Wasserman’s executives that they had significantly miscalculated the company’s needs.
Business seems to be moving along at 510 Madison, the luxury office building that developer Harry Macklowe traded to Mort Zuckerman’s Boston Properties last year. In addition to seeking major deals for multiple floors of office space, the building at Madison Avenue and 53rd Street is marketing to smaller tenants who would lease as little as 2,500 square feet (read: hedge funds).
“We have a great level of activity and we are willing to entertain deals from 2,500 square feet to multiple floors,” said CB Richard Ellis’ Paul Amrich, the rental agent for the building, at a cocktail party last night to introduce the building’s small-tenant program.
The Observer, upon receiving an invitation (apparently by accident), stopped by the party to check out the new building. As it turns out, the party wasn’t open to reporters, but we got an inside look anyway.
510 Madison Avenue
Finally, the pitter patter of feet at 510 Madison Avenue won’t just be coming from the contractors.
Senator Investment Group has signed an 11-year lease for 11,500 square feet, a source familiar with the deal told The Observer. The hedge funders will take the entire 28th floor of the 30-story building, which otherwise sits Read More
Harry Macklowe—the self-made real estate tycoon whose ill-fated $7 billion 2007 purchase of a portfolio of New York skyscrapers rendered him a symbol of the perils of overleveraging—is trying to reassert some control.
Mr. Macklowe is competing against fellow tycoon Douglas Durst, among others, in a bid to buy back the mortgage on one of Read More