The group agreed to take a portion of the floor—70 percent—with just enough of the north-facing view. The decision led to a lower cost-per-square-foot rent.
Afterward, drawing on their notable real estate lineage and savvy, Forty North’s owners wanted to have the flexibility to potentially grow in the building down the line.
For Mr. Solow and Mr. Panzer, they wondered how the building would allow Forty North the ability to grow its company without the landlord’s losing control over its space.
“We found some reasonable compromises,” said Mr. Panzer.
Forty North agreed to rights of first offer and rights of first refusal for contiguous space on that floor and on the 29th floor.
“The floor was a vacant floor so they got first dibs on what they wanted, which is part of the attraction for them,” said Mr. Panzer. Forty North will be paying $165 per square foot, said people familiar with the deal.
Should the company look to expand while keeping its rent at bay, it would have the chance to take another office floor in the lower bank of the building—used primarily for office accounting and support functions—while keeping the upper floors for client spacing and executive offices.
“That is exactly what KKR (KKR) did and what Apollo is looking at doing,” said Mr. Panzer.
For now—and coming soon in 2012—Forty North will be working among the top players of private equity and money management.
“They sort of flock to each other; it’s sort of interesting how they all operate,” said Mr. Panzer.
Since being tabbed as the leasing agent for the 1.5-million-square-foot building, Mr. Panzer has had to deal with sizable vacancy, not to mention a historically litigious building owner in Mr. Solow.
After brokering the KKR and Forty North deals at prerecession rates, Mr. Panzer is showing that there’s still demand for office space at desirable locations.
“It’s clearly an indication that there’s some strength in the market,” said John Cicero, managing partner of Miller Cicero, a real estate appraisal and consulting firm. “There is always demand for the top quality assets in this market,” he added.
drosen@observer.com
