Paul, Weiss Signs Largest U.S. Office Lease Of 2023
International law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP is relocating its office to 765K SF at 1345 Sixth Ave. in Midtown Manhattan, signing the biggest office lease in the city — and country — in all of 2023 just before the year ends.
Paul, Weiss' 20-year lease at the 50-story building fills most of the sizable hole left by insurer AllianceBernstein after the asset manager moved its headquarters to Nashville. Fisher Brothers, which owns the 54-year-old building in a joint venture with J.P. Morgan Asset Management, recently completed a $120M renovation, according to a news release.
The law firm, which has more than 1,000 employees, will occupy 18 stories in the property. The relocation is an expansion from its digs at 1285 Sixth Ave., where it reportedly leases roughly 550K SF.
Paul, Weiss Chairman Brad Karp said the firm expects to keep growing into the future, necessitating the boost in size.
“We are excited about our move to a spectacular new space that will elevate the daily experience for our clients and community,” he said in a statement.
RXR CEO Scott Rechler told Bisnow in a statement that 1285 Sixth didn't have room to accommodate Paul, Weiss' expansion, but he added that the landlord already is in talks with tenants for more than half of the law firm's space, which it will vacate in 2026.
RXR negotiated a modification for the building’s $1.2B mortgage, which is the largest loan on the developer's books, according to previous reporting from The Real Deal.
“We see Paul Weiss’s move and expansion, combined with the level of interest in their soon-to-be-vacated space, another positive sign for the market of well-located, Class-A office buildings in midtown,” Rechler said in the statement. “It highlights how there is a scarcity of high-quality, large blocks of space in midtown. Clearly, tenants are scrambling to secure the best space in the best buildings to meet their future requirements.”
The upgrades to 1345 Sixth Ave. included improvements to the building’s exterior, touchless elevators, a tenant lounge and NYC’s largest indoor terrarium. Fisher Brothers added an amenity floor operated by hospitality manager Ease Hospitality, known as @Ease 1345, which includes almost 6K SF of flexible meeting space and an event space capable of accommodating 440 guests.
Asking rents in the building range from the high $80s to $135 per SF, Commercial Observer reported.
AllianceBernstein, the former tenant at 1345 Sixth Ave., announced its intentions to move south in 2018, gradually relocating parts of its HQ over a four-year process and subleasing some parts of its space in the building in the interim years.
The law firm’s move into the building has also been in the cards for some time, with rumors first circulating during the spring. Fisher Brothers reportedly put negotiations on hold for other tenants while trying to sign Paul, Weiss, the New York Post reported.
“New York City continues to be an unparalleled place to do business, and we're thrilled to support Paul, Weiss' growth,” Winston Fisher, a partner at Fisher Brothers, said in a statement. “As we look ahead to a new year, this lease underscores an important global institution's commitment to having an in-person footprint in New York City.”
The lease announcement came hours after the owners of the MetLife Building on Park Avenue disclosed that the building's namesake tenant extended its lease for 400K SF through 2038.
Employee attendance in offices has been stabilizing over the course of the year, with the average worker spending three days a week in the office, according to data collected by the Metropolitan Transportation Authority and the Partnership for New York City.
Occupancy in the city's office buildings was near its highest level since March 2020 last week, according to Kastle Systems data.
“We believe the 4th quarter of 2023 will represent an inflection point in this cycle, and we expect to see a very active leasing market in 2024,” Rechler said.
Fisher Brothers’ Marc Packman, Clark Briffel, Charles Laginestra and Josh Fisher represented Fisher Brothers in-house in lease negotiations. CBRE’s Howard Fiddle, Peter Turchin, Gregg Rothkin, Benjamin Joseph, Anthony Dattoma and Bill Iacovelli, along with Russ Rabinovich and Jenny Haberman from Holland & Knight LLP, worked with the Fisher Brothers in-house team.
Newmark’s Moshe Sukenik, Chris Mongeluzo and Brian Cohen represented the law firm.
