Newish investment bank Moelis & Co., founded in the prelapsarian days of July 2007, when Big Real Estate blithely believed that the city would somehow escape the ravages looming darkly west of the Hudson, is expanding, signing a robust 10-year lease for about 96,000 square feet at 399 Park Avenue, according to industry sources.
An investment bank, you say?
That’s a promising morsel of news for the city’s commercial real estate industry, which has watched with muted horror as its main tenant—the financial services industry—has torn itself asunder in the credit crisis.
For its part, Moelis & Co. has been growing despite the downturn. The firm is headed by the time-tested Ken Moelis, who, according to a recent Economist profile, began his investment-banking career working with the notorious Michael Milken at Drexel Burnham Lambert. He later led UBS’s American investment banking operations. When he founded Moelis & Co., Mr. Moelis had 10 employees in New York and L.A. Now he has about 230, in New York and L.A., as well as in Boston, Chicago, London and, most recently, Sydney.
“We can confirm that Moelis and Company’s New York office is moving to 399 Park,” said Rohini Pragasam, a spokeswoman for the bank. “Given current market conditions and real estate rates, we are able to achieve significant cost savings and business synergies through this move. The new office fits the needs of our growing firm, and provides us with the flexibility for future expansion.”
CB Richard Ellis’ John Powers, Peter Turchin and Gregg Rothkin represented Mort Zuckerman’s Boston Properties (BXP) in negotiations with the bank, which was represented by Cushman & Wakefield (CWK)’s Lou D’Avanzo.
The bank is relocating from 245 Park Avenue, where last year it signed a three-year sublease from Arch Insurance for 30,000 square feet. Ms. Pragasam would not say if that was the sum total of the firm’s space at the Brookfield Properties (BPYPP)–owned building, but sources said that it now has a total of 45,000 square feet there. So this move amounts to a doubling of the firm’s office space. How optimistic!
On a similarly bullish note, boutique investment bank Mission Capital Advisors just signed a seven-year sublease for 8,593 square feet from United Business Media at the Rudin family’s 32 Avenue of the Americas, which more than triples the size of the firm’s office space.
Mission Capital principal David Tobin said that while his firm is doing well, he doesn’t expect firms like his and Mr. Moelis’ to fill the vacuum left behind by some of the supermarket commercial banks. “Investment banks have traditionally provided advice, and advice is extremely mobile,” Mr. Tobin said. “It doesn’t require the infrastructure of a commercial bank.
“The I-banking boom that has gone on for the last six or seven years was spurred by the credit bubble. That’s really been the driver. I don’t foresee that coming back in the foreseeable future.”
Mr. Tobin said he’s paying about 30 percent less at his new Tribeca space than he was paying at his old one, at Olmstead Properties’ 584 Broadway, in Soho.
CBRE (CBRE)’s Sam Seiler represented Mission in its negotiations with the sublandlord, which was represented by Adam Ardise, of Colliers ABR.
drubinstein@observer.com
