Office’s Hottest New Sub-Submarket
No longer is 40th Street on the wrong side of the Grand Central train tracks. It never was as sexy as its 42nd Street-and-north siblings, but RFR’s gut renovation of 285 Madison is launching a new hotspot. (Bandwagoners: Get ready to pretend like you knew it was cool all along.)
CBRE’s Mary Ann Tighe (whom we snapped yesterday on site with colleague Steve Eynon, RFR’s Steve Morrows, and RFR COO Gregg Popkin) tells us leasing has just launched for the 530k SF office building at 40th and Madison. While 285 Madison is close to the Grand Central transportation mecca, Mary Ann says, it’s also on the cusp of the sizzling Midtown South submarket. That means double the tenant pool for 285: both traditional and tech occupants. (Now hiring interpreters for when the two meet in the cafeteria.) And rents are promising there, too. Of the 52 deals that topped $100/SF in 2013, Mary Ann tells us, three were on 40th Street.
Didn't anyone teach Gregg to keep his eye on the ball? Actually, he glued it to the paddle to discourage folks working on the building from sneaking in a game in the display meant to appeal to Midtown Southies. The tours and events going on now are the first chance for brokers to see the space in 50 years. The previous owner, Young & Rubicam (which has moved to Moinian and SL Green’s 3 Columbus Circle), started with a single floor when the property went up in 1926, expanded into the entire building, and then bought it. RFR took it off Y&R’s hands for $189M two years ago, plugged in $65M, and is ready to reveal its hard work (it'll all wrap up by Q2). The last time new or renovated space debuted in the area was when 300 Madison delivered at 42nd Street in 2003, Mary Ann says.
RFR and CBRE also are promoting proximity to Bryant Park, a big area amenity since Intel put in free WiFi in 2002 and Bryant Park Corp ramped up programming; there’s something going on there 11 months of the year, Steve Eynon says. One could reach the park from 285 Madison in 30 seconds flat on one of the marketing center’s scooters, especially if you’re Steve Morrows, who just bought a scooter for his 6-year-old son and one for himself. Mary Ann says the vision for 285 Madison is a 100k to 200k SF tenant, leaving for smaller companies the unique floorplates and terraces that the wedding-cake setbacks create. All four folks showing us around also couldn’t get enough of the massive-for-a-prewar-building windows.
There are loads of amenities, too, which Mary Ann says approach hotel levels. Retail on the ground floor along Madison Avenue will show off the first floor’s 20-foot ceilings now that Y&R’s dropped ceilings have been removed. A 4,000 SF high-end restaurant on 40th Street will be open to the public but is meant for office workers to use for meetings and a change of scenery. The building also will offer conference facilities for tenant use, as well as a fitness center, bike room, and roof deck.
Mary Ann says 285 Madison has great branding opportunities for tenants. Similarly, Gregg tells us, Grant Thornton, whose 130k SF lease at RFR's 757 Third Ave (above) was announced today, will get prominent signage. The accounting firm is relocating from 666 Third. Berkley Insurance Co also just leased 37k SF, effectively completing RFR's lease-up (led by JLL's Mitch Konsker and Alexander Chudnoff) of the 500k SF building after KPMG left behind 180k SF in 2012.
