Pre-Built Green: Smaller Deals Driving Turnaround at 510 Madison Avenue

The 350,000-square-foot, 30-story, LEED-CS Gold-hopeful tower at East 53rd Street – whose floor plates were designed with high-end financial services tenants in mind – is bullish on its prospects in part based on the success of its smaller pre-built office suites.

510 Madison Avenue - LEED-CS Gold

Since its acquisition of the 350,000-square-foot, LEED-CS Gold-hopeful 510 Madison Avenue from Harry Macklowe last year, Boston Properties has been on a leasing roll at the 30-story tower. Earlier this week, financial services firm Thiam Management signed a lease for approximately 6000 square feet. The deal is for half of 510 Madison’s eighth floor, which had been divided into two pre-built units. (Each of the building’s floor plates is a uniform 15,000 square feet).

That other pre-built office was also recently leased to another financial firm called Africa Global. Both deals were for around $90 per square foot and brokers involved in the transactions are calling the tower one of Midtown’s best bargains: state-of-the-art, Class A office space, designed by Moed de Armas & Shannon, for less than $100 per square foot in a submarket where higher rents and older buildings are de rigueur.

But what’s most interesting about these two recent deals is not only that they’re transactions in green buildings, but part of a trend that we’re seeing in the marketplace towards pre-built spaces within high-profile Manhattan office buildings. For example, 7 World Trade Center and the Empire State Building have both seen their own fair share of pre-built deals in 2011. Pre-builts are generally geared towards smaller (less than 10,000 square feet) tenants who typically identify and secure their commercial office space just a few months before they need it and don’t have the time to hire a full-blown design and construction team. Its recent successes have 510 Madison already dividing its 10th, 18th, and 24th floors into pre-builts, which will range in size from 2500 to 7000 square feet at a number of different price points.

510 Madison Avenue’s green design features – about which we’ve written extensively here at gbNYC – stable ownership, and overall value proposition portend well for more deals to take place in the weeks ahead, which we’ll of course be keeping a close eye on. Though we’re the only ones speculating about it, we’re also curious whether Boston Properties might follow Silverstein Properties’ lead at 7 World Trade Center and dangle some of the Mayor’s green leasing language in front of prospective tenants in order to enhance the property’s image in what remains a highly competitive commercial marketplace.

About Stephen Del Percio

Stephen Del Percio has written for gbNYC+ since 2006 and currently serves as in-house counsel for one of the world's largest engineering, construction, and technical services companies. He earned a B.Eng. from Columbia, his J.D. at William & Mary, and lives in New York City with his wife and daughter. You can follow Stephen on Twitter, email him at stephen@gbNYC.com, or join gbNYC on Facebook to continue the conversation.

about gbNYC

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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Trackbacks/Pingbacks

  1. In Plaza District, Hedge Fund Takes 4500 Square Feet at BXP's 510 Madison Avenue | Best Manhattan Offices - Wednesday, September 5, 2012

    [...] floor or a better Manhattan leasing environment, the asking rents are significantly higher thanĀ those that Boston Properties received last year for two other pre-built spacesĀ (around $90 per square foot), which had brokers calling 510 Madison one of Midtown’s best [...]

  2. Striking Gold: Hedge Fund Finds Home at 510 Madison Avenue | gbNYC Real Estate Group | Commercial Real Estate & Green Buildings in New York City - Friday, September 7, 2012

    [...] floor or a better Manhattan leasing environment, the asking rents are significantly higher than those that Boston Properties received last year for two other pre-built spaces (around $90 per square foot), which had brokers calling 510 Madison one of Midtown’s best [...]

  3. Striking Gold: Hedge Fund Finds Home at 510 Madison Avenue – insiderater.com - Saturday, September 8, 2012

    [...] floor or a better Manhattan leasing environment, the asking rents are significantly higher than those that Boston Properties received last year for two other pre-built spaces (around $90 per square foot), which had brokers calling 510 Madison one of Midtown’s best [...]

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