Bridget Moynihan with Bob Sauerberg.

Conde Nast will announce plans to offer bundled or tiered subscriptions this summer, WWD reports, enticing customers to pay more for more kinds of content on multiple platforms.

Speaking at a paidContent conference, Conde Nast president Bob Sauerberg said the magazine publisher wants digital media to be the "gateway" for consumers to subscribe to a "brand"-formerly-known-as-magazine's  editorial products, including a "productized" version of the magazine's archives and “branded experiences.”

Print is still “the format of choice for consumers,” but Mr. Sauerberg said that the company has been focused on becoming "agnostic" to consumer preferences. And, despite the fact that they missed the chance to option The Rebekah Brooks Movie, Mr. Sauerberg was optimistic about Dawn Ostroff’s entertainment division.

“We have a chance to really build a big business taking branded and unbranded content, the access our editors have to talent, building on the DNA of who we are and build a terrific high-quality video business for us,” he said.

More details at WWD!

Tis a far, far better thing I do... (PriceTower.org)

There are two great thrones in American architectural criticism, that of The New Yorker and The New York Times. It was at these two journalistic institutions that the practice was born, at the hands of its king and queen: Lewis Mumford, that great champion of public works and technics, and Ada Louise Huxtable, still the dean of the design press.

Paul Goldberger has been in the fortunate, indeed unique, position of wearing both crowns. After graduating from Yale, he would find himself at The Times in 1973, a young buck roaming the city he loved, engaged to write just about whatever he thought of the buildings and street life therein. He was, quite literally, heir to Ms. Huxtable, who had not yet been pushed out of the paper for her obstreperous ways, and the two of them shared the job of architecture critic for nearly a decade. Two years after she left in 1982, Mr. Goldberger won the Pulitzer for his efforts.

Thirteen years later, in 1997, he would himself depart one side of Times Square for the other, joining The New Yorker, restoring the Sky Line column begun by Mumford half a century earlier at the behest of Tina Brown. "When I went there, I thought it was as perfect a life as you could have," Mr. Goldberger told The Observer in an interview Sunday evening, "to spend half your career at The Times, half at The New Yorker."

But like so many landmarks, from the Parthenon to Penn Station, few endure. Starting today, Mr. Goldberger will board the notorious Condé Nast elevator, but instead of getting off on the 20th floor, he will report to work two floors up, where Graydon Carter has finally poached Mr. Goldberger for Vanity Fair.

"I've known Graydon a long time, and this is something he has talked about for awhile," Mr. Goldberger said. "When he heard I might be leaving the critic's post at The New Yorker, he called again, and things sort of progressed from there."

An unofficial announcement has been making the rounds, as first reported by The Architect's Newspaper, and Mr. Carter praises his latest acquisition as unparalleled, according to a copy obtained by The Observer. “This is an appointment that thrills me profoundly,” Mr. Carter says in the release. “Paul is about as gifted a commentator on architecture, urban planning and design as anyone you’re going to find these days—in other words, he’s just a brilliant writer.” An interview request to Vanity Fair was not immediately returned.

While Mr. Goldberger acknowledged he will miss The New Yorker in some ways, he said it was his decision to leave the magazine, in part so that he would have more time to tackle a biography of Frank Gehry. He said he is very much looking forward to the new possibilities presented by his new publication, for which he has written in the past, "on a one-off basis" starting five years ago. His first effort was a profile of Ralph Lauren, followed by one of Robert A.M. Stern, who had just finished his magisterial 15 Central Park West. (Mr. Goldberger is quick to point out that he reviewed the building for The New Yorker before he wrote about it for the in-house rival.)

"Graydon's eager to do a broad range of things on design and I'm excited to be doing that," Mr. Goldberger said. "And I'm not being coy, we haven't figured out exactly what the parameters are yet, but there will certainly be stories that are design-oriented, not strictly architecture."

That eagerness is not a small reason for Mr. Goldberger decision to leave The New Yorker for Vanity Fair. "David has, I think it's fair to say, mixed feelings about the architecture column," Mr. Goldberger said of New Yorker editor David Remnick. It is a complaint he has aired before, most recently at a panel hosted by the New York chapter of the American Institute of Architects. Getting stories into a magazine, especially one that has shrunk considerably in size over the past decade, has become more and more difficult.

Four Times Square, an architectural masterpiece outside and in. (REW)

Indeed, there has not been a single Sky Line column since September 19 of last year, followed by two blog posts over the next week, and nothing since. Of the 14 pieces written last year, out of a total of 178 (according to The New Yorker's online archive) over a 15 year career, only six made it into the magazine—five columns and one Talk piece. Never mind that when you google either "architecture critic" or "architecture criticism," Mr. Goldberger's author page at The New Yorker is the second result, after Wikipedia.

Mr. Goldberger professes no animosity toward his former boss, and indeed said this has been one of his best and most productive working relationships. "David was great, just great," Mr. Goldberger said. "But change is good, too. I love The New Yorker, I like Vanity Fair, and I like the possibilities, which seem a lot broader than at The New Yorker."

Much of this is to do with the changing nature of publication, at Condé and beyond, the wealth of opinion online, the dearth of magazine pages, and so on. When was the last time you read a Joan Acocella review? And no, not one of those frivolous Critics Notebook pieces in the front of the book—which Ms. Acocella is at least fortunate enough to have to keep her busy every week or two. The answer is mid-January. Alex Ross is a little more lucky, managing a review of classical music at least once a month, plus regular blogging.

Mr. Goldberger is not alone in this, as his chief rival, The Times' newly coronated Michael Kimmelman, has been a less regular feature in the newspaper's pages than many had hoped. But at least The Times, which was criticized for appointing a non-expert to this important post, has not given up on the beat entirely. The New Yorker just may have, as there is no apparent replacement lined up for Mr. Goldberger. Any design writing, be it on IKEA, America's next top starchitect or tiny houses is likely to appear in the well of the magazine, not the back of the book. As of this publication, Mr. Remnick could not be reached for comment.

The absence of an architecture critic from the hallowed halls of Eustace Tilley Inc. is not actually as wretched as it sounds. Despite the prominence of Mr. Goldberger and Mumford before him, that is nearly the extent of architecture criticism at the magazine. Sure, New Yorker icon Brendan Gill took up the mantel near the end of his career, in the 1980s and '90s, but like Mr. Kimmelman (and Mumford) he was more of an enthusiast than a professional, like Mr. Goldberger, who has also taught architecture for years and briefly served as the dean of Parsons.

For his part, Mr. Goldberger said he is looking forward to his new gig and the flexibility being a Vanity Fair contributing editor will afford him, particularly to work on that biography of Frank Gehry. "It's a shitload of work," Mr. Goldberger said. "I've never written anything like this before, and I'm quickly realizing that writing a biography is going to take up a lot of time and energy."

That said, he still expects to write a number of things for Vanity Fair this year. But with the April issue already on newsstands, and production so many months in advance, how long will we actually have to wait for Mr. Goldberger to file his first piece?

In his first proper review for The Times, a piece on the then-new One Police Plaza published on October 27, 1973, Mr. Goldberger opened dramatically, as he often does: "Designing a building for the city of New York is the sort of nightmare that makes architects wonder why they didn't go into some easier profession, like neurosurgery."

The same might be said in some way about the business of architecture criticism these days.

mchaban [at] observer.com | @MC_NYC

While Condé Nast’s million-square-foot lease at 1 World Trade Center last year has become a dominant emblem of downtown’s resurgence as a popular destination for office tenants, the C&W group’s lease-up of 77 Water Street has also etched its way into recent lore in the neighborhood.

77 Water Street.

Mr. D’Avanzo and colleagues Robert Constable and Joseph Fabrizi, who are also top executives at C&W, have filled close to 600,000 square feet at the property in recent years, almost the entirety of the building, at times braving the recession’s darkest depths to do it. The string of deals has been so impressive that even brokers at rival firms have pointed to the activity as an early sign of momentum in an area that just a few years ago seemed haunted by the possibility of high vacancy.

A recent deal to fill the building’s 16,400-square-foot mezzanine level has shown that the team, despite all its success, hasn’t turned away from the property, a postmodern skyscraper built in the late 1960s by the family-owned Kaufman Organization.

“I’ve been telling my team, let’s wrap this up,” Mr. D’Avanzo said. “If you don’t follow through to the bitter end, all your client remembers is the bitter end.”

The C&W team inked the mezzanine-level deal with the Lactalis Group, a large French cheese making and dairy company that owns the popular cheese brands Sorrento and Président.

Mr. D’Avanzo said that several tenants had been interested in the space. The floor sits between the building’s ground level entrance and the second floor and is called the mezzanine due to its configuration; its perimeter, which encompasses 16,400 square feet, steps back from the 25,000-square-foot footprint of the floors higher above in the 26-story tower. Though smaller and close to the street, the space was attractive because of its above-average 14-foot ceiling heights. The floor, in fact, had sat vacant for as long as it did so that the team could have the option of offering it to larger tenants who wanted to add to existing space or use it as an entrance.

“There were options to potentially run an escalator up to the mezzanine level so we didn’t want to lease it until we were done with the rest of the building,” Mr. D’Avanzo said.

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.

For that very reason, the building’s roster of brand-name tenants shows a clear preference for creditworthiness, officials explained.

“We had to be very careful with who we selected,” Mr. D’Avanzo said. “If you have a seven-year lease term left on the sublease and your subtenant gives up the space after five years, the space you get back with a two-year term is just about worthless.”

Mr. D’Avanzo took the same approach with the mezzanine floor.

Numerous tenants had been circling the mezzanine space and making offers for the floor but when he and his team connected with Lactalis, they quickly zeroed in. The company, which will relocate from 950 Third Avenue in Midtown, is one of the world’s largest producers of dairy products and has solid financials.

“We looked at everything, even office condos that we could buy,” said Lactalis’s broker in the deal, Michael Burlant, a leasing executive who also works for C&W. “In the end 77 Water had the right combination of criteria. It was a very cool building, the mezzanine level has great ceiling heights, and the rents are competitive. When Lactalis saw this space, there wasn’t any hesitation; they were sold.”

Perhaps unsurprisingly, Mr. D’Avanzo, a boyish-looking broker who has worked at C&W for most of his career, appeared preoccupied with the second floor rather than celebratory. In his determination to fill the building’s remaining vacancy, he showed the same ethos that bred success throughout the leasing campaign.

“We want to lease that space,” Mr. D’Avanzo said.

Sure enough, Mr. D’Avanzo is close to a deal for about half of the floor, he claimed. Nonetheless, even with only about 12,000 square feet of space left to lease, the agent hardly seemed satisfied.

“I told my guys, bring me a list of every tenant in the market who could be a taker for that remaining piece,” he added. “Let’s make sure we’re reaching out to them.”

dgeiger@observer.com

Freshly tanned from a recent visit to Mexico, where he was overseeing a new project, the slicked-back scion grew steadily more enthusiastic as he discussed 40 Wall Street, an office tower that, with its rising and falling tenant roster, has contributed to the Trump Organization executive vice president’s growing reputation as a competent steward of the family name, a reliable fixer and successful dealmaker in his own right.

Donald Trump Jr. (photo credit: Hannah Mattix)

“When I took over the building, there was a lull in the market,” recalled Mr. Trump, who said the address remains one of his well-known father’s favorite properties. “By the time we fixed everything up and got it going, there was a high. It was certainly a unique experience. My focus had been on residential development as well as some resort hotel development, so to learn that part of the business and to spend time with that part of the business was fascinating to me. So I got involved and made it a big part of my day-to-day life.”

Indeed, 40 Wall Street had languished in the Trump portfolio since the mid-’90s, when family paterfamilias Donald Trump purchased the building from Kinson Properties, a Hong Kong-based company. Back then, internal discussions raged on whether to convert the office tower into residential property or to keep it as offices, according to insiders. The senior Trump eventually settled on keeping it as an office tower, and nearly 20 years after that decision, 40 Wall Street’s fortunes fell on his oldest son, who until then had never managed an office building.

(Disclaimer: Mr. Trump is the brother-in-law of Observer Media Group owner Jared Kushner.)

The junior Trump had spent much of his career overseeing a stretch of luxury developments along the West Side rail yards. He then jumped from project to project, working on construction of Trump International Hotel and Tower in Chicago and handling Trump licensing deals across the world.

But managing an office building as storied as 40 Wall Street, until recently known among tenant brokers as a difficult place to do business in part because of at least one Trump executive’s heavy involvement with leasing at the address, was entirely new to Mr. Trump.  

Now faced with his first-ever office-building management assignment, Mr. Trump made a strategic play to woo brokers, who, perhaps more than anyone else, had the leverage to sell 40 Wall Street to potential office tenants. “I look at the brokerage world as your unpaid sales force until they perform,” he said. “What I wanted to do was befriend those people, get to know the players.”

He reached out to Jeffrey Lichtenberg, an executive vice president at Cushman & Wakefield who had worked with the Trump Organization in the past. Mr. Lichtenberg and his team were eventually brought on as the exclusive leasing agents for 40 Wall Street, and from there, they courted other big brokerage firms to rouse up business.

“What we did was, instead of having one big party, we had a series of lunches with each firm,” said Mr. Lichtenberg. The message, brokers on both sides of the table said, was simple: 40 Wall Street was open for business. It wanted to work with brokers and it wanted new tenants.

“Because Don was cooperative and helpful to me and then we were cooperative to the brokers, the brokers realized that the best place for them to bring a tenant to get a deal done was 40 Wall,” added Mr. Lichtenberg. “Don helped turn around the image of the building.”

What also helped spur leasing activity was Mr. Trump’s willingness to sweeten the deal by offering incentive packages. He also kept a simple pledge: if a broker brings in business to 40 Wall Street, he would make honoring that broker’s commission a top priority.

“If I tell them I am going to do something, I am going to do it,” said Mr. Trump. “If I tell them that they’re going to get their commission check on this moment, they are going to get it on or before this moment,” he added, hitting the table with an index finger for emphasis.

That pledge worked. Jones Lang LaSalle broker Dan Suozzi, who had lunch with Mr. Lichtenberg and his team at Bobby Van’s during that recruitment period, estimates he has brought four tenants to 40 Wall Street in the past two and a half years, the most recent being John Carris Investments for roughly 13,000 square feet. (Former New Jersey Governor Jon Corzine was rumored to be subleasing space from John Carris.)

“Don Jr. was a pleasure to work with and he does the right thing and is very personable,” said Mr. Suozzi. “It makes a difference when you’re bringing a tenant through the building.”

Once they had the ears of intrigued brokers, Mr. Trump and his team focused on redefining 40 Wall Street’s image as a financial services asset. “With the Wall Street address 10 years ago, it was all financial industry,” said Mr. Trump. “Today, in the digital age, the street location is less critical.”

Mr. Trump also honed in on what his family’s building could offer that his competitors couldn’t. He targeted a crowd that didn’t fit the traditional mold of a Wall Street tenant, selling them on 40 Wall Street’s “impeccable” management services and attractive deal incentives. The Trump Organization has a “fungible” balance sheet that enabled it to offer value propositions, he added.

Wall Street address aside, 40 Wall Street had the charm of a Midtown South building with Midtown South amenities. It had recently renovated tons of turn-key space, and it had a Duane Reade megastore, the first of its kind that, with its sushi bar and a hair salon, could give the average customer a new ’do with her bottle of Kaopectate.

“With the Condé [Nast] deal and with everything that is going on downtown, I think it’s an opportunity for buildings to have boutique space they can do something with and offer that value proposition to tenants that are going to be the guys who are going to feed off those megadeals,” said Mr. Trump.

The offer worked. Midtown mainstays like the Harry Fox Agency and Duane Reade committed to the building for substantial office space, each with square footages in the five figures. Wiedlinger Associates and Leslie E. Robertson Associates also moved into the building.

“I had never done a deal with the Trumps in my 18-year career,” said Greg Taubin, a senior managing director at Studley who represented the Harry Fox Agency in its 47,144-square-foot sublease on the fifth floor. “You would always hear different things about having to deal with the organization, but those days are over. The reason is because of Donny Jr. getting involved and making decisions.”

Now faced with tenable vacancies in the base of the building, nearing a total of 100,000 square feet, Mr. Trump is enjoying his time at 40 Wall Street while also working on the development of Trump International Golf Links in Scotland.

“What makes my job interesting is that on any given day I can work on something that’s totally different,” he said. “It keeps things very interesting and fluid.”

drosen@observer.com

Burton Resnick.

The Commercial Observer: It seems you have been focused on renovating a lot of your existing buildings, like the Symphony House and 199 Water Street.
Mr. Resnick: Water Street was a building that was built in the ’80s. We have lease turnovers coming up in 2014. We are marketing the building for the tenancy downtown and the brokers downtown but now it’s the brokers and tenancy in Midtown, also because downtown is not an insurance or financial district anymore.

With Condé Nast and the Daily News and with other different industries moving into the area, downtown is not only the financial district. If I remember correctly, it’s the third-biggest central business district in the country. It’s not only financing, but everything else. And we built 199 Water Street, which is at the seaport, in the ’80s, and we leased it up, and now leases are coming up in 2014. We have about 250,000 feet of space to rerent. We are repositioning the building and upgrading the building into a 21st-century building.

What kind of tenants did you have in the building?
It was primarily Prudential Securities, who sold out to Wachovia Securities, and they sell a lot of the space to insurance companies and lawyers and financial industry tenants.

When you built the building, did you have a particular kind of tenant in mind? Or was it built in such a way that it could accommodate any kind of tenant?
It was primarily financial services. The first tenant was Lloyd’s Bank of England, who took the bottom third of the building. The top half of the building was taken by Prudential Financial and the middle part was taken by various and sundry financial companies and lawyers.

With the downtown office landscape moving away from being primarily just finance and insurance firms to including a variety of other businesses, do you have to market your space differently from how you did when you first opened the building?
You know what, it really doesn’t make any difference. I think that we have a building in the Hudson Square area that we just revamped, which is primarily an advertising agency and public relations agency and a law firm, and various and sundry industries like that. It used to be a printing area. Today, I don’t think there are areas that are solely one industry. I think New York has developed into a multifaceted industry town, which is great, because we’re not reliant only on the financial industry. So the New York scene is a different scene than it was 20 years ago and longer.

How would you describe the downtown office landscape when you first started out?
Well, when I first started out, anything below Canal Street or really Worth Street was financial, and parts of it—where the World Trade Center was going—was all camera places and electronic places. There were areas that were one-industry areas. That was 1956—you were mostly likely a gleam in your mother’s eye at that time.

I’ve seen the transformation of all areas. Park Avenue used to be lawyers and financial companies. Madison Avenue was advertising. It ain’t that way today. New York is becoming a more vibrant and multifaceted city. We have a building over on Greenwich Street and Park Place, which is two blocks north of Larry Silverstein’s building and where the World Trade Center is being built, and across the street from where the Bank of New York has their big operation center on Barclay Street. When we opened that building, we thought it was going to be primarily government agencies, and it wound up being not only government agencies but … Reuters was in there, which was [then] a communications company. Donnelly was a printing operation for the financial sector … Luckily this city has a vibrancy to allow it to continue to change.

How do you, as a building owner, prepare for that change?
Well, every tenant, theoretically, needs the same kind of service. Some tenants need a little more electricity, some tenants need more bandwidth, some tenants need more high-tech stuff, but most tenants today need about the same stuff. They need enough electricity, they need temporary power, emergency generators, they need room for their computers and space for their computers and the backup for their computers, air conditioning. It isn’t only a 9-to-5 business today. A lot of these companies are 24/7. I’m sure you’re aware of that at The New York Observer. You need overdrive air conditioning, you need generators, you need all those things. What we’re doing with our buildings is we’re constantly upgrading the infrastructure so we can handle almost every possible requirement that a tenant will need.

That’s funny, as I imagine bandwidth and Wi-Fi were the last things on your mind when you first owned these buildings.
Well, it depended upon the industry that you were getting in there. Our first tenant at Water Street was a British bank which had operations throughout the world, and they ran a 24/7 operation. We have Prudential Securities, which ran a 24/7 operation, because they had to be up when the Japanese market was open and they had to be up when the British market was open. So they were—and I remember we had to get our garage to open early in order to get the people up there so that they could get in when the London market was open. So it hasn’t changed—I mean it’s changed, but the difference is the bandwidth and all the refinements of the computers. There were computers then, also. There were computers that could fill up this conference room that I’m sitting in. Right now you’re going to have as much power in a little Apple iPhone. Whoever thought about Wi-Fi in the ’80s? You didn’t understand what the hell it was then, and now you can’t do anything without Wi-Fi.

What other kinds of potential tenants have come in and looked at the space?
The whole landscape of tenants from financial to publishing to lawyers, to insurance, IT. Remember, this area, the building on Water Street goes down to John Street.

John Street was the spine of the insurance industry in downtown. William Street and John Street were where all the insurance companies were, and Pine Street. But they’re all over the place now. So we have some insurance companies who are also looking in the area.

Looking ahead, what are going to be the next challenges for these buildings? Is it preparing them for the next technical innovation? Turning them all into LEED-certified buildings?
How many times do I have to say yes? [Laughs.] Honestly, look what’s happening two blocks away with 1 World Trade Center. Those buildings are really a little bit smarter than the buildings that were built in the ’80s and ’90s.

But I think the buildings that were built in the ’80s and ’90s, as long as they had the ability to add those extra smarts to it, you’ve got it made. When the World Trade Center originally was built, that was the ’60s, late ’60s, early ’70s. How smart were those buildings? One thing they had was ceiling heights and they had pretty good open areas. They were able to put a lot of stuff into that ceiling height.

When we built Water Street, we built a building with four columns on the whole floor in a 30-odd-thousand-foot floor. But we had emergency power, we had an under-floor duct system, we had supplemental air conditioning, we had a loadable electric, we had Telecom at that time. And the LEED certification is important. We’re firm believers in the green concept of buildings. We’re trying to do it in all of our buildings. You’re not going to be able to do it the way Douglas [Durst] and Bank of America did it with Bryant Park because those buildings were designed to be platinum. But if I had it to do all over again, I would go higher in the buildings that we built. But at that time nobody knew about LEEDs.

What are some of the other projects you are working on?
Oh, we’ve got the rerenting projects on Water Street, which I mentioned, and we’ve got 75 Park Place, which is Park Place and Greenwich. We also are looking at other things to buy and to invest in and we’re also constantly upgrading our existing portfolio of office buildings and apartment houses. We believe in upgrading the buildings before we have to—a constant mantra that I have here.

drosen@observer.com

The firm had split its operations between two closely located buildings on Third Avenue, 750 and 767 Third Avenue. A quick perusal of the former revealed that only a tantalizing scrap on the building’s 10th floor was available. Alone, it wasn’t going to cut it. Endurance, a roughly 60,000-square-foot tenant at the time, was looking to grow by about 50 percent or more.

750 Third Avenue.

Vacancy existed at the latter building, 767 Third Avenue, but the thought of expanding into it began to make Endurance’s executives uneasy.

The buildin’s floorplates are modest in size—between 7,000 and 13,000 square feet—and the company was already spread across three of the property’s floors.

“To add the amount of square footage they needed would have put them on probably more than three more floors,” said Ryan Masiello, an executive at Jones Lang LaSalle, who represents Endurance. “It just wouldn’t have been efficient.”

In a vertical city like New York, having a stack of floors is typically a fact of life for most mid- to large-size companies. Still, the optimal arrangement that most brokers seek for their tenants is a space with as few levels as possible to avoid the redundancies that multiple floors can create and also to prevent an organization’s operations from becoming splintered.

Indeed, Endurance executives were concerned at the outset of the company’s search that by the time it was done growing, its offices would be a matrix of enclaves, Mr. Masiello said.

Enlisting the assistance of JLL’s New York-area president Peter Riguardi, Mr. Masiello began to search the market for options that would avoid that outcome.

“Peter came on board and he really added to the search from a strategic standpoint,” Mr. Masiello said. “We were thinking of all the different scenarios that Endurance could pursue. Do they buy out of their lease at 750 Third? Do they consolidate everyone somewhere else? Do they continue to occupy multiple buildings? And putting a cost to each possibility. It was exhaustive.”

With an expiring lease at 767 Third Avenue, Mr. Masiello knew the company could at least slip out of that space and go elsewhere.

“That building is a great building, but it’s really more for boutique-size tenants and we were outgrowing it,” Mr. Masiello said.

He began to focus on 277 Park Avenue, a nearly-two-million-square-foot Midtown skyscraper where floors range between 23,000 square feet and more than 50,000 square feet apiece. There too, however, a solution would likely be complex. Mr. Masiello said he began negotiating a deal there that would include a blend of space directly from the building’s landlord and sublease space being offered by the building’s largest tenant, JPMorgan Chase. By taking some sublease space, which generally is cheaper than direct space, the JLL team was looking to blunt the cost of the deal for Endurance. Still, the lease wasn’t going to be cheap. Park Avenue rents are among the highest in the city.

Then an unexpected opportunity arose.

Gregory Tosko, an executive at the real estate services firm CBRE, reached out with an offer. Mr. Tosko represents the large media and publishing company Condé Nast, one of the largest tenants at 750 Third Avenue. Condé Nast acquired the space in 1999 when it purchased Fairchild Publications, which based its operations out of the building. According to Mr. Tosko, Condé Nast had moved portions of Fairchild’s operations into its headquarters space at 4 Times Square over the years and subleased the space to other tenants, including The Economist and Reader’s Digest. Now, it had realized that it wanted to divest more.

“Condé Nast had a cafeteria on 750 Third Avenue’s second floor, but because it had shrunk its presence at the property, a decision was made that it no longer really made sense to continue operating that facility,” Mr. Tosko said.

A lease was drawn up for the second floor, but Mr. Masiello could see plainly that it wasn’t going to be a perfect fit. The space was about 40,500 square feet, less than what Endurance needed. Perhaps hoping that a solution could still be found, Mr. Masiello continued the negotiation, but he also continued the leasing talks at 277 Park Avenue so that he could preserve a backup option. The process was getting complex. He was speaking simultaneously with the owner of 277 Park Avenue, a Cushman & Wakefield team that was representing JPMorgan Chase, Mr. Tosko and Condé Nast and also the landlord of 750 Third Avenue, SL Green.

“It was an incredibly intense period,” Mr. Masiello said.

Finally, a break came in the talks at 750 Third Avenue. To get the second floor subleased, Condé Nast had space on the 10th floor that it could add onto the small amount of space that SL Green already had on that floor, creating about 17,000 square feet of extra availability. Not only that, SL Green agreed to structure the termination date of the expansion space to align with the 2022 expiration date for Endurance’s existing floors in the building, 18 and 19.

“It was a critical juncture where nobody came out of the woodwork with some kind of ridiculous demand at the last moment,” Mr. Tosko said.

Mr. Masiello said it was tough to have to call off the talks at 277 Park Avenue, because the C&W team had labored diligently on the deal.

“They were disappointed but they understood. They were total professionals,” Mr. Masiello said.

In the end however, the deal at 750 Third Avenue was almost $30 per square foot less expensive than what Endurance would have had to pay at 277 Park Avenue, a substantial cost savings.

Endurance will now have approximately 91,000 square feet at 750 Third Avenue.

The firm will stretch its operations across three floor, but the new layout includes far fewer floors than what it would have had to take at 767 Third Avenue, and allows it to consolidate in one location rather than two, as it would have had to do by going to 277 Park Avenue.

“It’s not one floor, but it’s the best solution when all the various factors in the process were weighed,” Mr. Masiello said. “A big part of being a broker in the city is managing a client’s expectations. They weren’t going to be able to have a single huge floor somewhere, but they got a great solution nonetheless.”

dgeiger@observer.com

Mary Ann Tighe.

The Commercial Observer: Two years ago, you were named chair of the Real Estate Board of New York. Around the same time, you told me that, among other goals, you hoped to increase what was then a membership of 12,000. Have you achieved that goal?
Ms. Tighe: Well, actually, we’re over. I know we’re, right now, at the highest level we’ve ever been in its history. It’s over 12,000, but I don’t know the exact number. I can tell you that we’ve brought in, for example, a number of additional Class A members.

What have you learned from the experience? Has being chairwoman posed challenges?
Well, I think that I did not have a full appreciation of the complexity of REBNY’s portfolio—the diversity, the complexity of it, and the abundance of issues with which REBNY deals. And I now have an appreciation for how encyclopedic Steve Spinola’s knowledge of New York City real estate is. I also have great pride in the reshaping of the staff that happened under my chairmanship.

Besides bringing in new staff members, you also created a political director position, to which you appointed James Whalen. Why hadn’t REBNY already thought of that idea?
Mr. Spinola had done everything, and with a great staff. He has really fine people. But the idea of bringing somebody in to whom Steve could offload hadn’t occurred. We deal with the feds. And that was another important point of emphasis for me. I wanted to make sure we were playing on all fields because, increasingly, federal regulation and the state were as impactful, or potentially as impactful on the city, as New York City was. And so to cover all three playing fields, with the manpower that existed, that was impossible.

And so how is bringing in someone like Jim Whalen helpful?
Just, again, taking a look at, for example, the work that we were able to do in Albany. Jim has engaged the Committee to Save New York. They were critical in the period when we were dealing with the issues of rent stabilization and the legislation connected to that. And we were very concerned about how that was all going to shake out. We were very concerned about some of the regulations that had to do with Fannie and Freddie that said you couldn’t use financing from these entities if you had a flip tax on your property. Now, you know that’s a standard feature in many of the co-ops in the city. So we would have cut off all kinds of funding. Again, that’s a federal-level issue. So it’s in issues like that where they jumped in and were able to have an impact.

Besides playing defense, which is probably a large part of what people like Jim do at REBNY, have you been able to inject fresh thinking into the 116-year-old organization?
When I became chairman I wanted the board not only to play defense, but to also be the generator of big ideas that would help move the city forward. And there are a variety of things we’ve been focused on that are big ideas that will take many years to play out. And that’s another reason why people don’t engage the big ideas—because everybody wants to have something that’s instant gratification.

But I can tell you that I am very proud that the board has engaged the subjects of, for example, the No. 7 line. That’s Example 1. But Example 2 is relooking at Midtown zoning, raising the question with our city planning commission. Have we inadvertently frozen one of the most—in fact, not one of but the most—important business district in the city? As I phrased it when I spoke with Amanda Burden, “Are we in danger of becoming a very romantic 20th-century city because we have made it impossible to build in the 21st century in some of the key locations in the city?’
Last year, you worked on at least three of the city’s biggest and most remarkable office deals: Condé Nast, Coach and Young & Rubicam. All said, was 2011 good for you?
Yeah, 2011 was a very, very good year for our firm. It was a very, very good year for me, personally. And all is well on the personal front. So all in all, fine.

At the beginning of 2011, did you have any inkling that it would end so successfully?
I felt pretty certain we were going to do the Condé Nast deal. Let me say it slightly differently: If we were doing a Condé Nast deal, we were well underway. I had actually thought, since we signed a term sheet in August of 2010, that we would close on the deal by very late in the fourth quarter 2010.

And yet the deal at 1 World Trade Center wasn’t finalized until May. What happened?
We didn’t sign until the third or last week in May. So what happened after we signed the term sheet in August is that we had two quarters of what I call “problem identification.”

What does “problem identification” mean, exactly?
It’s just, basically, not negotiating. You’d start to negotiate, and then, “Whoa, I didn’t know we had that problem.” And, “Whoa, where did that come from?” Because remember, the World Trade Center is a unique site. And I think I had been naive about the fact that because Beijing Vantone Industrial had signed a lease there, I had some expectation that all the questions had been answered. Here’s the simplest example of the first harbinger—which came in September—that questions weren’t answered: Condé Nast asked the question, “Where do we vent out our kitchen? We don’t see vents on the facade.”

You must be referring to Condé Nast’s legendary cafeteria at 4 Times Square, which its rumored to be replicating at 1 World Trade Center. There were problems, you say?
Yes, and they said, “We don’t see any vents on the plans.” Now, how’s that for a straightforward question? So, just showing where our heads were, I’m like, “Oh, we must have some early-stage plan,” because a big part of selling Vantone was that they’re going to have true Chinese food dining on their premises, so that when you headquarter there, you’re going to be able to eat food that tastes like the mother country.

So, I’m like, “Oh, they must know the answer to this.” P.S., the answer came back, “Oh, no. There are no vents.” And so, obviously, Condé asked the next question: “Well, then, how might we exhaust from the kitchen?” And the answer was, “We’re going to run black iron up the shaft”—truly, an enormously expensive thing to do, and also the longest black iron run in history, probably. So we now have a conversation. That’s when the bell sounded. And all of a sudden, we’re like, “Geez!” And we said, “What did you tell Vantone? What was their solution?” By the way, after we asked that two or three times, we began to realize Vantone never asked the question. So there were no solutions.

Considering that the Condé Nast deal was, in fact, signed, I assume the problem got solved?
It was because we had a tremendously gifted team leader from Condé, Bob Bennis, who is a master of design construction, and has been at Condé for many, many years. Bob walks in, and he says, “I can tell you how many deliveries a week Condé Nast gets. I can tell you how many come by messenger, how many come by tractor-trailer, how many come by van. How many people come for lunch.” This is a company that has been operational for years—for decades—and Bob is the master of this data.

Meanwhile, the deal with luxury handbag designer Coach was announced in November, but as I understand it there’s still a ways to go before it’s finalized. What’s left to do?
Everything—all the documentation and all the operational questions: How do we get in? How do we get up? What do we control? What does our signage look like? Who pays for this? Who pays for that? All of it. We have a very detailed term sheet. But now we’re in the nitty gritty phase. And we’ll see whether Coach gets done.

With both of those deals, you paint a tumultuous picture. What about Young & Rubicam?
The big surprise of 2011 was Young & Rubicam—or Y&R, as they call themselves today. Because we’ve been working on Y&R for many years, and we didn’t know whether or not we were going to solve the problem. So fortunately, the problem got solved.

What did the problem surface, and when did it get solved?
Seven weeks before it signed, because we walked into the year thinking that we had a shot to make a deal for Y&R at 1107 Broadway. And around June we discovered that the building was not going to go commercial. It had been bought out of bankruptcy and was going to be converted into a residential building. So that blew up. But the Y&R deal was used as a stalking horse, with the understanding that there was what they call a “kill fee.” If the deal didn’t happen there was a certain sum of money the bankruptcy court gave out. No one wanted the money. Everybody wanted the building and the deal. But, as it turned out, Witkoff triumphed in the auction process, which took place on one day in June. It was just one day in the judge’s chambers.
How many times have you attended the annual REBNY gala?
Oh, gosh. I’ve been, easily, more than 25 times—easy.

Is there one gala that stands out, either because of something great that happened, something embarrassing that happened, or something memorable that happened?
That’s easy. It was the January gala that came immediately after 9/11.

Why?
Remember that our business was frozen for many, many months after 9/11. There was a general sense of, was the model of how we were built—our great vertical city—going to vanish because no one would ever want to be in a skyscraper again? These thoughts seem inconceivable today. But they were absolutely on everybody’s mind back then. And to feel the commitment of the members and the recognition that everybody felt such a connection to the city, and a desire to see its citizens and its skyline restored to health, was inspiring. The energy was about those emotions. That’s the banquet that jumps out.

Without knowing for sure, how would you summarize this week’s REBNY gala?
Brandl Frey, the chairman of the Young Men’s/Young Women’s Real Estate Association, said to me at the banquet last year, “Oh, this is so amazing. This is the first time I’ve ever been.” And so I’m like, “What are you talking about, Brandl?” So I said, “Here’s what I want you to do: Young Men, Young Women, I want you to organize. You pick the number of young people who would not be able to get in through their firms. And let’s get tickets so that we have, for the first time at this one coming up, 2012, a whole slew of people who are the next generation of leaders. And YMREA should be the ones to select them and make them our guests at this event.” So that’s what’s going to happen this year.

jsederstrom@observer.com

1 World Trade Center (Courtesy Getty Images)

The deal, if finalized, will be for the 42nd, 43rd, and 44th floors in the 104-story tower, a person familiar to the transaction confirmed to The Commercial Observer.

"Conde Nast had an option to expand and they told the Port Authority and the Durst Organization they were going ahead with it."

People at The Port Authority, CBRE and The Durst Organization all declined comment.

A spokeswoman for Conde Nast could not immediately comment on the deal.

Last year, Conde Nast, the publishers of Vanity Fair and The New Yorker, signed a whopping $2 billion, 25-year lease at the 1,776-foot office tower.

UPDATE (5:07 p.m.):

A person familiar with the lease negotiations confirmed Conde Nast's latest proposed deal, adding that the publisher exercised an option to expand into those additional floors. The asking price for those floors is $75-per-square foot, the source said.

Once the deal is finalized, Conde Nast will have floors 20-44 in the building.

A Conde Nast spokeswoman sent in this statement to The Commercial Observer:

“We are exercising our option to take the maximum number of floors as stated in the original agreement, we are not taking additional space on top of that.”

drosen@observer.com

The bank had been in discussions to extend its occupancy at the building for months. On Monday, insiders with direct knowledge of the deal and a spokeswoman for the bank, confirmed that the contracted lease had been signed on Friday morning.

114 West 47th Street (Courtesy Property Shark)

The deal is the second ancillary location to the bank’s New York City headquarters at One Bryant Park here it has significantly decreased the size of its office footprint.

According to several sources familiar with 114 West 47th Street, Bank of America in recent years has leased virtually all of the building’s roughly 660,000 square feet of space. Though Bank of America wouldn’t confirm how much space it has at the 20-story midtown building, which sits nearby to One Bryant Park along Sixth Avenue, the lease renewal would appear to be a substantial reduction in space it has at the location.

The deal follows a downsizing in Lower Manhattan in recent months. The bank inherited about three million square feet at the World Financial Center when it purchased Merrill Lynch during the financial crisis in 2008. Merrill’s space was set to expire in 2013 and there was widespread speculation in the real estate industry how much the bank would keep. Last summer, Bank of America ended up renewing only a fraction of the square footage Merrill had there, about 750,000 square feet.

The Durst Organization owns 114 West 47th Street. For a time last year, there was speculation among real estate brokers whether Bank of America could relocate from 114 West 47th Street, including rumors that the bank could take space at Four Times Square, which abuts One Bryant Park. Conde Nast, Four Times Square’s biggest tenant, is relocating from that property to One World Trade Center. The Durst Organization owns Four Times Square and developed One Bryant Park with Bank of America as its anchor tenant there. The landlord also purchased a $100 million stake in One World Trade Center, an investment that was viewed by many real estate observers as a facilitating factor in Conde Nast’s move to that tower.

Lately though Bank of America has suffered setbacks that have appeared to preclude bold real estate commitments. Last summer, the bank paid out $8.5 billion to settle claims from investors that lost money on mortgage backed securities during the downturn.

Cushman & Wakefield represented Bank of America in the deal. The Durst Organization is represented at the property by an in house team of leasing executives. Neither could be reached for comment by press time.