Joe Pompeo Sept. 15, 2009, 11:47 a.m.
Listening to Steve Durels ponder the challenges of renovating a distressed building, you could hardly be chided for mistaking the SL Green leasing director for an interior decorator.
The out-of-place lobby chandeliers, the dreary old windows, the demolished floors, the bathrooms in disrepair: It was no wonder the beleaguered office tower to which he was referring has had such difficulty drawing tenants. Mr. Durels sighed.
“At the end of the day this will be an exercise in correcting those things about the building that were done … imperfectly,” Mr. Durels said rather artfully earlier this month, while in the conference room of the SL Green Realty Corp. offices at 485 Lexington.
The building in such need of resuscitation, of course, is 100 Church Street, the 21-story tower that SL Green took control of in August after the Sapir Organization defaulted on loan payments to the real estate investment trust. Among real estate insiders, it’s one of the most closely watched properties in a portfolio of 30 New York City buildings currently managed by SL Green, touted as Manhattan’s biggest owner of office buildings.
With 650,000 square feet of vacant office space and a long decade of leasing challenges—Curbed dubbed it “The Office Building Nobody Wants”—the 1.13 million–square–foot 100 Church could represent a daunting challenge for Mr. Durels, who helms nearly 300 transactions each year for SL Green.
“I can tell you already we’ve got a half-dozen prospects who are looking at space for everything from 75,000 square feet to 250,000 square feet solely because of our involvement, and that’s after two weeks,” said Mr. Durels, who has made a career out of identifying distressed properties and determining how to refurbish them.
THAT CAREER, however, might have taken a different path had it not been for the stark reality of a tractor.
An economics major at the University of Iowa, Mr. Durels deigned to study the business of agriculture in the Midwest, but veered from that course early on.
“It was a different lifestyle,” said Mr. Durels, the father of a 19-year-old daughter and husband to Elizabeth Durels, who works in advertising. “The goal was agricultural economics, so it was the business side of it—but I went to school, and the first thing they did was give me a tour of the John Deere plant. It didn’t work for me.”
Mr. Durels rose as the director of leasing for Helmsley-Spear Inc., where he managed 2.5 million square feet of Harry Helmsley’s personal assets.
When he arrived at SL Green in 1997, the company was managing 2.5 million square feet of property and had just gone public, Mr. Durels said. SL Green now represents 24.5 million square feet in the five boroughs in addition to 5 million square feet in Westchester and Fairfield counties.
“It’s a radically different company than it was then,” said Mr. Durels, 49 and an avid fly fisherman who owns a summer home in Idaho. “The structure of the organization, the size of the company, the quality of the portfolio—in many respects, we started off as a small company.”
Since then, Mr. Durels has been responsible for some of the most complicated leasing transactions in the company’s history, including ones involving the 1.4 million–square–foot 919 Third Avenue and the 2.6 million–square–foot building at 1221 Avenue of Americas, which is 95 percent occupied.
LOOKING FORWARD, Mr. Durels is now discussing lease possibilities at 1515 Broadway, the home of Viacom and, more conspicuously, the glass-paneled MTV studio space known primarily for the hordes of squealing teenagers once drawn to its Total Request Live show. Viacom announced last month that it would seek new space for the MTV studio, freeing up 24,250 square feet on two floors as well as $2.5 million in billboard space. Mr. Durels said that after a renovation that would connect the floors by escalator, the space would trade at $200 a square foot.
“We’ve sat down with half a dozen people and had really solid conversations,” said Mr. Durels of the television studios, entertainment conglomerates and retail outfits that have expressed interest in the location. “Times Square is one of those submarkets that, despite what’s going on in the rest of the world, it’s still on everybody’s radar as a place to be.”
Perhaps most near and dear to Mr. Durels’ heart, however, is 100 Park Avenue, which, after a $72 million glass-and-steel renovation, stepped out as the city’s first existing building to receive LEED certification.
More importantly, rent at 100 Park Avenue has doubled from its pre-renovation highs of $32 per square foot at the base and $50 per square foot for the top floors, Mr. Durels said.
“That fired on all cylinders,” Mr. Durels said. “Everybody was very proud of what it looks like and we’re very proud of what we achieved on the economics side. I’m proud of that.”