Perfume Wearing Off at 1095 Avenue of the Americas
Continuing the theme of negative absorption, CRE-Insights noticed that Sunday’s New York Times featured an article on 1095 Avenue of the Americas in New York City, located on Bryant Park just across the street from the new Bank of America Tower. It seems that while most of the building is officially “under lease”, the committed tenants are drastically reducing their space needs and therefore seeking to unload the excess via sublease or landlord buy-outs. With committed “face rents” reported up to $130-150/RSF, and current market rates below $100, a few corporate real estate managers will be hurting, while those prepared to lease/sublease can do well.
1095 Avenue of the Americas (aka 1095 Sixth Avenue) has been owned by Blackstone Group since its 2007 acquisition of Equity Office Properties. EOP purchased the building (minus a 20% carve-out) in 2005 from Verizon, which traced ownership back to its construction in 1974 as both a “Central Office” and the corporate headquarters of New York Telephone (Verizon predecessor/subsidiary).
Beside Verizon, which still owns (presumably via condominium) floors 6 through 12 of the building, tenants include (with details and links to related articles):
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MetLife; >400k RSF; $90/RSF average; represented by Jones Lang LaSalle
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Dechert LLP; 234k RSF; 21-yr term; signed 12/2006; represented by Cushman & Wakefield
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iStar Financial; ~107k RSF flrs 35-37; starting at $132/RSF; signed 6/2007; representation unknown
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Royal Bank of Scotland; ~70,000 RSF; around $150-160/RSF; representation likely Staubach/JLL
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Centerline Capital; 100,000 RSF flrs 3-5; $125-140/RSF; signed 12/2007; representation unknown
It seems the people who should really be – ahem – “recgonized” are CBRE’s Bob Alexander and Robert Stillman, who head-up the agency leasing assignment on behalf of Blackstone. These guys have managed to squeeze city-leading rents out of a former utility company building. Now that is what brokers call “perfuming the pig“!
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