“The Most Complicated Deal I Personally Have Handled.”
By Jotham Sederstrom January 17, 2012 12:04 pm
reprintsIt’s not uncommon to hear Manhattan’s real estate market characterized as sophisticated or complex.
Not every day, however, does a requirement as straightforward as Dentsu McGarryBowen’s uncork such an elaborate and interconnected series of transactions as it did at the Starrett-Lehigh Building.
A longtime tenant in the 2.3-million-square-foot building and one of the property’s largest users, the advertising firm needed to expand. But there was a small problem: Despite its size, the building—an artsy, far West Side location popular among creative tenants—had virtually no available space.
Dentsu McGarryBowen occupied more than 100,000 square feet in the building with several years left on its lease, but it couldn’t imagine relocating elsewhere or subleasing the space.
“This building is exactly their style,” said David Hollander, an executive with CBRE (CBRE) who, along with colleague Sacha Zarba, represented Dentsu McGarryBowen in the transaction. “They didn’t want to be in a more conventional location. They couldn’t imagine being anywhere else.”
Mr. Hollander poked around and soon found an opportunity. The Harry Fox Agency, a tenant on the fifth floor, was looking to relocate and shed its 50,000 square feet—exactly the amount of space Dentsu McGarryBowen was hoping to accumulate. Adding to the luster of the potential deal, Mr. Hollander had been in conversations with the building’s landlord, RXR Realty, which was willing to cancel the Harry Fox lease so that it could sign one directly with Dentsu, an arrangement that offered advantages for the tenant.
But what seemed at first glance like a perfect swap turned into anything but.
