1stdibs, an online auctioneer of high-end vintage items, including pieces of art and furniture, will be the first office tenant at Edward Minskoff’s 51 Astor Place, taking 42,000 square feet across the 12-story tower’s entire third floor. Reported today by Crain’s, the 15-year-deal is in the $80s per square foot, escalating into the $90s over the term of the lease. Designed by Fumihiko Maki, 51 Astor Place is pursuing a LEED Gold rating from USGBC and features a low-e, glazed glass and aluminum curtain wall and green roof spaces. The tower’s other advanced building systems and state-of-the-art infrastructure have made it an attractive option for technology companies, notwithstanding its steep rents.
But the 1stdibs lease is an important transaction for the developer, Edward Minskoff, and for Midtown South in general. Last year, the Hult International Business School backed out of a deal where it was to take the entire second floor of the tower in a 55,000-square-foot educational institution lease that is required by the site’s zoning terms. Trophy tech tenants considered spaces at 51 Astor Place over the last year but the tower – built on spec – was completed without any of them after Facebook decided on 160,000 square feet at 770 Broadway across the street and Microsoft took space at 11 Times Square.
Yet 51 Astor Place also offers some important insights about high-performing, LEED-certified, Class A office space in Manhattan in 2013. First, particularly in red-hot submarkets like Midtown South, large availabilities of contiguous blocks of office space are few and far between. So it proves that holding firm on asking rents is a viable leasing strategy. Second, demographics are forcing developers and landlords to implement the environment-friendly and advanced building technologies that younger and savvier workforces find attractive in their employers’ office facilities. Indeed, as Dan Geiger wrote earlier today in Crain’s:
The deal with 1stdibs appears to fulfill a core presumption of the building’s development. Just as boutique financial companies like hedge funds pushed up rents in Midtown’s Plaza district and on Park Avenue, the tech sector too is producing deep pocketed space users eager to populate a class of elite office buildings in Midtown South. Mr. Minskoff also pointed out there are practical advantages to 51 Astor Place, such as better technology and infrastructure than the neighborhood’s extensive stock of handsome but aged office buildings. “This building has systems and technology that a tenant would have to spend millions recreating in an older building,” Mr. Minskoff said.
For these reasons – coupled with its subway and adjacent access to talent at both NYU and Cooper Union – the 1stdibs transaction seems likely to kickstart more leasing activity at 51 Astor Place: Crain’s also reported that Mr. Minskoff is close to closing another deal, with talks ongoing for six others.