Midtown Midsummer Green Lease Update

Let’s check in on some recent leasing activity at two of Manhattan’s highest profile new commercial office buildings, both of which are pursuing LEED ratings and commanding Class A rents.

Although the local real estate market has certainly cooled in the past few months, leasing activity at two of Midtown’s highest profile green commercial projects continues to remain hot. Marathon Asset Management, which agreed to pay $115 per square foot for the 38th and 39th floors at LEED Platinum hopeful Bank of America Tower in early 2007, recently agreed to a 5-year sublet for a portion of its space with Korean financial firm Mirae Asset for $150 per square foot. Although Marathon isn’t the only financial services firm that’s looked to shed space in light of current market conditions, it’s a good sign that demand is still strong for premium Class A space, though whether One Bryant Park’s green features are driving the significant lease premium is obviously pure speculation.

Real Estate Weekly reports that the deal is a winner both for Marathon, which planned to take more space than it needed anyway prior to the downturn, as well as the Durst Organization, which gets to keep half of the premium from the higher sublease thanks to a provision in its lease agreement with Marathon.

Other recent financial services leases at the Bank of America Tower have been equally astronomical; last summer, hedge fund HBK Ivestments signed on for the building’s 40th floor at $135 per square foot, while Apex Capital Management took 7300 square feet on the 37th floor for $160 per square foot.

Meanwhile, at Harry Macklowe’s LEED Gold hopeful, 350,000-square-foot 510 Madison Avenue, only one tenant (investment firm Jay Goldman & Company) has signed a lease, albeit at a whopping $150 per square foot for an undetermined, 11,500-square-foot mid-rise floor. Recently, Apple came quite close to signing on with Macklowe, but REW reports that although the company has backed off, a number of other potential tenants remain interested in the tower’s full-floor blocks of space.

As gbNYC noted previously, the 30-story project at 53rd Street was designed by SCLE Architects with collaboration from Moed de Armas & Shannon. Each floor plate in the building is 15,000 square feet or smaller and the speculative tower is thus being marketed at high-end tenants capable of occupying an entire floor of space. Trusses on the sixth floor transfer the structural load to three interior base columns, which allows for column-free tower floors.

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gbNYC is a multi-disciplinary consulting and real estate services firm. In addition to representing office tenants and commercial buyers in leasing and acquisitions, we also provide innovative consulting solutions from a unique, green building perspective. We advise on green building financial incentives, comment on proposed green building marketing strategies, author white papers, treatises, and market analyses, organize seminars on the LEED process and professional accreditation, and provide advice and analysis on green building risk management and the overall state of green real estate, leasing, and construction, in New York City and beyond.

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