Green Leases

Earlier today, the City Council passed the four pieces of legislation which Mayor Bloomberg introduced last April as his "Greener, Greater Buildings Plan." As you'll recall, building owners immediately opposed one of the bills (Int. 967: Audits & Retrocommissioning), which would have required them to implement a bundle of energy efficiency upgrades with a payback period of less than five years after the results of a rolling audit process. While auditing remains part of the approved legislation, owners will not be required to make the improvements, which will now just be identified based on a "reasonable" payback period. Public buildings, however, must still install any retrofit measure that the audit pegs with less than a seven-year payback. Although the costs of auditing were noted by opponents to the bills earlier this year, mandatory energy audits are now required every ten years, though buildings certified under LEED-EB and Energy Star are exempt.

Thanks, perhaps, to a $5 million facelift and LEED-EBOM application, 515 Madison Avenue (at East 53rd Street) has been a recent bright spot in an otherwise unspectacular Manhattan commercial real estate market thus far in 2009. Recently, three deals were finalized at the 42-story tower: (1) a 22,300-square-foot, 15-year lease at $65 per square foot on the building's fourth and fifth floors for the Memorial Sloan-Kettering Cancer Center; (2) a 9100-square-foot, 10-year lease for communications company Kreab & Gavin Anderson Worldwide, which will take the entire 18th floor at $65 per square foot; and (3) 1900 square feet to Hamilton Investment Funds over five years for half of the tower's 27th floor at $67 per square foot. Newmark Knight Frank chair Jeffrey Gural owns the neo-classical 515 Madison, which was built in 1931 and originally designed by J.E.R. Carpenter. Gural retained Rosen Johnson Architects in connection with the building's renovation project, which included an expansion and upgrades to the building's lobby.

Larry Silverstein has leased the last available prebuilt space at his 7 World Trade Center. As you'll recall, the tower was the first commercial office building in New York City to earn LEED Gold certification. Equity and derivatives traders Volant Trading, which was formerly located at 99 Wall Street, plans to move into building in March. The firm is quadrupling its existing space by taking 7800 square feet at 7 WTC, or approximately one fifth of the tower's 33rd floor. Volant signed a seven-year deal at $75 per square foot. CB Richard Ellis's Rob Wizenberg, who represented Volant in the negotiations, noted that the firm "wanted absolutely top-quality space. The layout was perfect and they love being downtown."

The New York Observer reported earlier today that Al Gore's Generation Investment Management firm has finalized its lease for 5500 square feet on the 48th floor of the Durst Organization’s Bank of America Tower, which expects to receive the first-ever LEED Platinum rating for a commercial high-rise from USGBC. Asking rents at the Midtown tower, which was designed by Cook + Fox, had been hovering around $185/square foot; it’s unclear how much Gore’s firm agreed to pay for the space, but as of last July, this was the asking price for the only two remaining floors in the building. We've commented on the various factors (including the tower's sustainable design features) driving these incredible figures previously; recall that the most recent statistics from Cushman & Wakefield are an average of $93 per square foot for Class A space in Midtown.