Year in Real Estate

Triple-Digit Boom: The Details Behind 2013’s Most Expensive Leases

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In the exclusive confines of the Plaza district, a handful of elite financial services firms spent 2013 inking triple-digit leases—those deals carrying rents in excess of $100 per square foot. Once rare, these deals have skyrocketed in those few buildings boasting the unique infrastructure requirements for the world’s top money managers.

From Aby Rosen’s landmark Seagram Building to Sheldon Solow’s 9 West 57th Street, the triple-digit fraternity is an exclusive club for both landlord and tenant. Approximately 60 leases fell into the triple-digit category in 2013, the bulk of them signed during the second quarter, according to data from CompStak.

Below, The Commercial Observer breaks down the key figures and shines some light on the most expensive deals of 2013.

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Lease Beat

Aquila Management to Relocate to Tower 45

120 W. 45th Street, Tower 45

Aquila Management, a sponsor and distributor of mutual funds, will relocate to 120 West 45th Street, also known as Tower 45, from 380 Madison Avenue. The company has signed a 15-year lease for 8,032 square feet on the 36th floor of the SL Green property.

The tenant will pay rent in the high-$60s per square foot, according to data from CompStak. Asking rent for the space was $72 per square foot. Read More

Lease Beat

Tiger Global Management Joins Triple Digit Rent Club

Courtesy of Wikipedia

Tiger Global Management is the latest to break the triple digit threshold for commercial space in the city.

Following Ruane, Cunniff & Goldfarb Inc., which signed a deal in late May, the investment management firm will be taking a massive 32,000-square-foot space in the prized Plaza District 9 West 57th Street. The building, owned by Sheldon Solow, is known for its breathtaking views and the ability to demand close to $200 per square foot. Read More

Lawsuits

Solow Sues Banks over Manipulation of Libor

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7 West 57th Street Realty Co., a real estate company controlled by Sheldon Solow, filed a lawsuit in federal court yesterday against Citibank, Bank of America, Barclays, JPMorgan and a number of other banks for allegedly conspiring to manipulate the London Interbank Offered Rate (Libor).

The complaint alleges the defendant banks’ conspiracy to manipulate Libor resulted in the seizure of Mr. Solow’s $450 million bond portfolio by Citibank. The portfolio was pledged as collateral for Libor denominated loans, the complaint says, and was comprised largely of high-grade municipal bonds. Subsequently, Solow was obligated to pay a $100 million judgment. Read More

The Lawyers You Call

The Upheaval of Sheldon Solow

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A real estate executive who was formerly one of the top officers in the real estate empire of billionaire owner and developer Sheldon Solow has filed what is likely to be a multimillion-dollar lawsuit against Mr. Solow for unpaid retirement funds, The Commercial Observer has learned.

Steven Cherniak worked with Mr. Solow for 26 years before abruptly leaving Mr. Solow’s firm, Solow Realty and Development Company, in 2008. In a case filed in U.S. District Court on July 19, Mr. Cherniak alleges Mr. Solow dismissed him without cause and didn’t pay him a previously agreed-upon retirement package. Read More

Sales Beat

Levinson In Talks To Buy A Stake In And Redevelop 380 Madison Avenue

380 Madison Avenue

Developer David Levinson is in talks to invest in and help redevelop 380 Madison Avenue, an 840,000-square-foot Midtown office building sources say.

The property is currently controlled by the mercurial and enigmatic investor and developer Sheldon Solow who has a leasehold on the property. But that interest runs out in 2014 and the owners of the building, a venture led by Deutsche Bank’s real estate investment fund RREEF, want to bring on a partner to overhaul the antiquated tower. Read More

Lower Manhattan

Downtown Manhattan on the Up and Up

Downtown Manhattan.

For much of the past decade the only hope for a broker looking to make money off of Downtown office space was to do a deal like 70 Pine Street: Take a lavish 62-story Art Deco headquarters that was once owned by a spectacularly failed financial firm like AIG and turn it into opulent apartments where bankers would rather live than work.

Deals like 70 Pine Street, which instantly wiped off one million square feet from Downtown’s commercial real estate inventory when it was sold for $200 million in 2011, have been propping up statistics for the neighborhood’s office space market for years. Ever since large banks and financial companies started fleeing offices in the financial district, an influx of young families and bankers wanting to live Downtown, rather than just work there, have kept the vacancy rate from tanking even further by reducing the math on the supply end.

Now, say the brokers who have long suffered the horrors of Downtown’s commercial market, those residential conversions are starting to also pay off on the demand side. A flurry of infrastructure and amenities building to keep up with the new residents in the neighborhood is also making the area more enticing for large corporations to move in.

“It’s a chicken-and-egg scenario,” said Mark Shapses, executive managing director at Studley. “Downtown is seeing the light at the end of the tunnel.” Read More

Lease Beat

Deutsche Bank Takes 50K in Brooklyn

4 MetroTech. (Courtesy Property Shark)

Deutsche Bank AG will be opening its first office in Downtown Brooklyn after it agreed to take 50,000 square feet at the JPMorgan Chase-owned 4 MetroTech Center, The Commercial Observer has learned. Read More

Financing

Solow Nabs $625M for 9 W. 57th Street

9 West 57th Street

Billionaire landlord Sheldon Solow has locked up a $625 million loan from Deutsche Bank AG to help refinance a securities-backed debt tied to 9 West 57th Street that was slated to mature in February, sources confirmed.

The loan, which was first reported by Bloomberg.com last week, will be used as “ongoing capital” for 9 West 57th, a person familiar with the matter told The Commercial Observer.

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Lease of the Week

A Room With A View (Of Central Park)

9 West 57th Street in all its glory.

For an emerging—albeit press-shy—wealth management firm like Forty North Capital LLC, snagging a prime block of office space on the 30th floor of a building that features stupefying views of Central Park and an intimidating list of titanic private equity tenants like Kohlberg Kravis Roberts & Co. and Silver Lake Partners is indeed a bold move.

In August, Forty North signed a 10-year lease to take 17,000 square feet at 9 West 57th Street, a gleaming, 50-story skyscraper owned by real estate titan Sheldon Solow with an address that a business of any shape or size would kill to have on its business card. Read More