This Week's N.Y. Deal Sheet
The cold air appears to be bringing deals with it. The office leasing market had its best week in a while, with three deals signed for over 100K SF, including a major Midtown South expansion for the world's most valuable company.
TOP LEASES
Microsoft signed a 150K SF lease at Bromley Cos.’ 122 Fifth Ave., another major deal for one of the pandemic's most active office tenants nationwide. The deal comes after Bromley constructed a new building and expanded the existing Midtown South building's floor plates into the new structure, according to a Newmark spokesperson.
JLL’s Lisa Kiell and Randy Abend negotiated the deal for Microsoft while Newmark’s David Falk, Eric Cagner, Peter Shimkin, Ben Shapiro, Jordyin Comras and Dylan Weisman brokered the deal for the landlord. Microsoft is taking floors six through 10 of the 300K SF building, which was previously home to Barnes & Noble's offices.
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Verizon signed a 143K SF office lease at 155 Delancey St., a part of Taconic Investment Partners, L+M Development Partners, BFC Partners and Goldman Sachs Urban Investment Group’s Essex Crossing. Verizon will pay about $80 per SF for the space over the next 20 years, the New York Post reports. The company plans to move a portion of its employees from the 575K SF of offices it owns at 140 West St., also known as the Verizon Building, but it is unclear how many.
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New York University inked a five-and-a-half-year renewal with a half-year of free rent for its 116K SF space at Tishman Speyer’s 11 West 42nd St., the New York Post reports. The 32-story Class-B office building near Bryant Park boasts tenants such as Michael Kors and Valentino, in addition to NYU. Rent ranged from $55 per SF to around $61 per SF depending on the year, with $33 per SF worth of tenant improvements, per The Post.
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Online cooking brand Food52 is moving to the other side of the East River. The company, currently located at 122 West 26th St., will take up 42K SF at Rudin Development and Boston Properties’ Dock 72 in Brooklyn. WeWork occupies 220K SF of the 670K SF building and served as co-developer. Food52 is the first lease signed at the building since it opened in 2019.
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Insurance company Argo Group will take up 30K SF at Empire State Realty Trust’s 501 Seventh Ave., the real estate investment trust announced. Argo joins tenants such as PVH Corp. and media company Captivate in the 18-story tower near Penn Station. JLL’s Owen Hane and Kevin Duffy brokered the deal for the tenant while Cushman & Wakefield's Ron Lo Russo, Patrick Murphy, Pierce Hance, Heather Thomas and Will Yeatman represented ESRT alongside in-house reps Keith Cody and Ryan Cass.
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A couple of blocks East, ESRT signed Playfly Sports to take up 30K SF at 1333 Broadway, the REIT announced. The recently renovated 12-story property, located across from Macy’s in Herald Square, boasts tenants such as Signature Bank and Canon. Savills’ Michael Mathias and Richard Johns brokered the deal for the tenant, and ESRT’s Ryan Kass, Keith Cody and Shanaee Ursini brokered the deal in-house for the landlord alongside Cushman & Wakefield’s Robert Lowe, Ron Lo Russo, Anthony Lo Presti, Dan Organ and Maria Travlos.
TOP SALES
Effy Jewelry paid SL Green $103M for 590 Fifth Ave. The real estate investment trust took the property over after foreclosing on previous landlord Thor Equities last fall. At the time, the property was valued at $84.6M. Columbia Medical Center and AdvantageCare Physicians are among the tenants in the Class-B office building.
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Related Cos. paid Spitzer Enterprises $77M to obtain 99.99% ownership of the development sites at 506 West 36th St., 512 West 36th St. and 511 West 35th St. Spitzer acquired the land in 2013 for $88M, and the two developers planned on building a 1.4M SF commercial and residential building. The properties are two blocks north of Related and Oxford Properties Group's $25B Hudson Yards development.
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Riverside Abstract paid $20M for a homeless shelter at 85-15 101st Ave. in Ozone Park, Queens, property records show. Asher Shafran signed for the seller, and Riverside Abstract President Yoel Zagelbaum signed for the buyer. The building was once a Lutheran church. In 2013, Mayor Bill de Blasio announced it would be turned into a shelter, a move that propelled backlash from some community members at the time, QNS reported, including some who went on a hunger strike to protest the establishment.
TOP FINANCING DEALS
Goldman Sachs and Deutsche Bank provided a $420M acquisition loan for Harbor Group International's purchase of the CBS Building at 51 West 52nd St., PincusCo. Media reports. HGI also scored $138M in mezzanine debt from Brookfield Real Estate Finance for the purchase. HGI paid $760M for the 38-story building in August and is gearing up for major renovations, Commercial Observer reported. CBRE’s James Millon, Tom Traynor and P.J. Finley negotiated the financing, per Pincus.
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AIG Asset Management provided Edward J. Minskoff Equities with a $97M construction loan for the development of a spec office project at 29 Jay St., The Real Deal reports. The company bought the property for $62M in March 2020, just weeks after New York City went into lockdown. The Dumbo building, designed by architecture firm Marvel, is set to reach 11 stories, New York YIMBY reported.
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Sackman Enterprises refinanced its development at 15-19 West 96th St. with $45M of debt financed by First Republic Bank, PincusCo. Media reports. The project, which will yield 17 apartment units across 22 stories, is set to be completed by the second quarter of next year, according to CityRealty.
