By the time Uris Brothers broke ground on the 30-floor skyscraper designed by Emery Roth and Sons, 41 new “competitive”—Class A in modern commercial real estate parlance—office towers with a total of 10.5 million square feet had been completed since the war; another 14, including 485 Lexington, were under construction, and plans had been filed for 13 more, according to a February 1956 New York Times article.
The building was Uris Brothers’ sixth midtown project since 1949, when the 21-story Arabian American Oil Building was completed. The 351,000-square-foot “Look Building” at 488 Madison Avenue, the Colgate-Palmolive Building at 300 Park Avenue, and two others followed. By the middle of the decade, critics “were predicting that a point of over-building was being reached,” The Times reported. Luckily for Uris Brothers, their fears proved to be unfounded.
“The continued demand for office space in the competitive buildings was highlighted last week by the announcement that the [30-] story building under construction at 485 Lexington Avenue was 90 percent rented,” The Times wrote.
The firm also announced plans to build a seventh midtown property next door at 750 Third Avenue. SL Green acquired both properties—and 1.1 million square feet of vacant office space—from the teachers’ pension fund TIAA-CREF for $480 million in 2004, in what was also considered a risky investment. Two years and $90 million worth of capital improvements later, SL Green’s gamble on 485 Lexington appeared to be paying off, like the Uris Brothers’ had 50 years earlier. In 2006, Class A Manhattan office prices had jumped from the $282 a foot SL Green paid for 485 Lexington, and the building was 97 percent occupied. Its value to potential investors, barely two years after acquisition, was rising.
Its two biggest tenants, Citigroup N.A. and the Travelers Indemnity Corp., occupy half of the building under leases that expire in 2017, the same year SL Green’s $450 million mortgage matures.
Mr. Zion, the managing director, said these two leases were “the key” to the company’s deal with Optibase and Gilmore, but, according to another source, Citigroup is shopping for a tenant to sublet its offices on the 15th and 16th floors of 485 Lexington. Mr. Zion declined to discuss any specifics about the deal since it was still under contract, except to confirm that upon closing, Optibase and Gilmor will “have the ability to control management and leasing.”
Cushman & Wakefield, who brokered the stake sale for SL Green, and the Carlton Group, who represented the buyers, declined to comment for this article.
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