News.

Weekly Market Report - May 31, 2022

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NY Public Library leases 41k sf for Midtown offices


The NYPL signed a 33-year lease at 270 Madison Avenue, the Commercial Observer reported. The office space is across three floors of the 19-story building, covering 41,000 square feet. Financial terms of the lease weren’t disclosed. ABS created a structure, however, that will allow the library to apply for a real estate tax exemption. The firm plans to offer that model to other nonprofit tenants who want long-term leases.The move continues a busy stretch for the library, which recently sold six commercial condo units at 445 Fifth Avenue for $38 million to StreamLine LLC.


The library purchased the space, close to its flagship branch, in 2014 for its back-office staff. In 2018, ABS landed a $72 million loan for the office building from Des Moines, Iowa-based Principal Life Insurance Company. The loan replaced a $68 million note from JPMorgan Chase in 2015. Other tenants at the 269,000-square-foot building include law firm Wolf Haldenstein, which began its tenancy when the property was completed in 1923. The law firm occupies 33,000 square feet.


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Burberry sews up deal at Tishman Speyer building


Burberry, which is known for its trademarked “Burberry Check” plaids, signed a 15-year lease for nearly 43,000 square feet at 11 West 42nd Street. It will have the entire 18th floor and part of the 19th.


Burberry will relocate from Westbrook’s 444 Madison Avenue where it has been since 2009 and enjoyed the iconic top-of-tower signage that previously touted Newsweek and later New York magazine when those publications were tenants in the building. Burberry’s new digs overlook Bryant Park and sources said the new lease has a starting rent of $64 per square foot with a tenant improvement letter of $130 per square foot along with several months of free rent. The fashion company joins other garmentos in the West 42nd Street building, including Valentino, Versace and Michael Kors. Other tenants are CIT Group and New York University’s School of Professional Studies.


NYU renewed its lease last fall, taking 115,000 square feet for five years and getting six months’ of free rent in the deal, along with other sweeteners that reduced the net effective rent to $46.18 per square foot. Soon after that, architecture firm Kohn Pedersen Fox scored a year of free rent in extending its stay and taking another 38,000 square feet at the building, bringing its total to 100,000.CIT’s timing was not as good. The commercial lender extended its lease for 15 years in 2018, three years before it was to expire and two years before the pandemic made discounts easy to come by for office tenants. The 960,000-square-foot office building is known as Salmon Tower for developer Walter J. Salmon. It opened in 1927, just in time to host Herbert Hoover’s campaign headquarters.


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RFR seeks extension on 285 Madison loan


The $235 million CMBS loan for 285 Madison Avenue was transferred to special servicing this week. The special servicer is KeyCorp Real Estate Capital Markets. The fixed-rate loan was securitized in a CMBS deal in 2017 and is set to mature in November. In November 2017, RFR refinanced the 26-story property with $270 million in loans from Natixis Real Estate, replacing earlier debt provided by Goldman Sachs and Aareal Bank. Korea-based KTB Asset Management co-originated additional refinancing, bringing the total to $475 million.


RFR bought the majority interest in the 511,200-square-foot property in September 2016, paying $334.1 million for an 85 percent stake in the building. The transaction cut out GreenOak Real Estate, East End Capital and Downtown Properties from their stakes in the building. RFR and the partners paid $190 million for the 511,000-square-foot property in 2012 — the building was vacant at the time. The asset’s biggest tenant is clothing company Tommy Hilfiger, which leases about 220,000 square feet at the building. The company isn’t going anywhere anytime soon, as its lease runs through Oct. 31, 2033.


Ziff Capital Partners holds a 26,000-square-foot lease that isn’t up until 2026. Aby Rosen recently sealed a deal for another office property, teaming up with Penske Media Corporation to finalize a $290 million purchase of 475 Fifth Avenue. Penske, which publishes Variety and Rolling Stone, contributed 50 percent of the equity in the partnership


New York City’s Path to Recovery May 2022, tenants in the market were overwhelmingly from the FIRE and TAMI sectors, accounting for 66.1% of total requirements. More than half of tenant requirements are currently located in Midtown.