When Bloomberg sailed into Wells Fargo (WFC)’s chosen space at 120 Park Avenue, industry insiders were shaken by the switch. Now Crain’s reports that even Wells Fargo thought they had the space nailed:
“A few weeks ago, [senior vice president John] Saclarides got a call from the landlord telling him that the bank was being bumped to accommodate Bloomberg, which had signed a lease for 400,000 square feet.”
SEE ALSO: Blackstone Mortgage Trust Wins D.C. Office Portfolio at Auction for Bargain Price Said Mr. Saclarides: “I was on a train when the owner called, and I asked him to repeat it to make sure I heard him correctly. I’m extremely disappointed because we had put a lot of time and effort into that deal.”
Crain’s reports that this kind of no-holds-barred war for desirable spaces over 100,000 square feet is becoming more common.
WilmerHale, for example, was blindsided when the owner of 825 Eighth Avenue said it wouldn’t sign an agreed-upon deal for 200,000 square feet because it was negotiating with Nomura Holding America, which needs nearly four times as much space. Likewise, law firm Chadbourne & Parke lost the chance to renew its lease at 30 Rock when Deloitte signed its 436,000-square-foot deal there in December.
Said Crain’s: “A combination of the improving economy and lease expirations are pushing more big tenants into the market at a time when their options are limited by the city’s aging building stock and lack of new construction. In the constant power struggle between tenants and landlords, the latter are gaining back the upper hand in the market for spaces of more than 100,000 square feet.”
The Commercial Observer spoke with two sources on Feb. 18, who confirmed that there has, in fact, been an uptick in showings of the market’s larger available spaces. Meanwhile, Wells Fargo says they plan on negotiating with multiple landlords so they don’t get “flatfooted again.”
Landlords bumping tenants out of major deals, while tenants entertain multiple possible spaces until the last minute? It should be an interesting year.
