Betting On Soho, Newmark Team Picks Up 40 Thompson
Daniel Geiger April 24, 2012, 12:13 p.m.
A leasing team from Newmark Grubb Knight Frank led by the company’s New York area president David Falk is taking over the agency assignment for 40 Thompson Street.
The building, though a small commercial property by most standards, adds to Mr. Falk’s growing body of work in Soho, an area that many leasing experts expect to become an increasingly popular destination for office tenants given the recent surge of activity in Midtown South.
Mr. Falk has been involved in dealmaking in the area for years, handling the assignment for the Puck Building, a large commercial property owned by the Kushner Companies (whose principal, Jared Kushner, owns The Commercial Observer). Recently Mr. Falk was awarded the leasing assignment for 200 Lafayette Street, a 150,000-square-foot building in Soho that was recently acquired by a partnership between Mr. Kushner and the Los Angeles based real estate investment company CIM Group.
Mr. Kushner has envisioned a bold renovation of the property that will mesh the planned installation of new infrastructure and modern amenities with the 100-year-old building’s classic aesthetic. The project seeks to capitalize on the lack of higher-end office space offerings in Soho.
“There really are not that many quality commercial buildings in Soho, but with what has been going on in other areas of Midtown South, such as the Meatpacking District, interest is building among tenants to be there,” Mr. Falk said.
The area already has the chic appeal of other parts of Midtown South such as the Meatpacking District because of its concentration of retail and nightlife. Now landlords like Mr. Kushner and Steven Elghanayan, the owner of 40 Thompson, are betting that it can make the same transition into a sought-after office neighborhood.
Danny Levine, a managing director at Newmark who works with Mr. Falk, is overseeing the agency assignment at 40 Thompson and told The Commercial Observer that Mr. Elghanayan, who bought the building in recent months as part of his acquisition of a portfolio of properties from the real estate investment trust Vornado, is planning to make improvements on the seven-story, roughly 35,000-square-foot property.
The work clearly is geared to take advantage of the influx of tenants to the area, who are increasingly willing to pay for quality space in a market with the lowest vacancy rate of any major business district in the country. Asking rents in the $60s-per-square-foot for the space are planned, what would have once been unheard of rates in Soho but now appear more than attainable.
“It’s really cool space with high ceilings and big windows,” Mr. Levine said. “Epic (Mr. Elghanayan’s company) is planning to do work on the lobby.”
Mr. Levine also pointed out one of the building’s unusual amenities as a potential draw for tenants; it has a glass elevator that runs exterior to the building and hence has views of the surrounding area.
“How many office buildings have an elevator like that where you ride up to your floor and can watch the street as you go?” Mr. Levine said.
The building also has an attached side lot that Mr. Levine said Mr. Elghanayan may convert into an outdoor space for tenants.
“We’ve been communicating to the tenant community that Soho is a great part of Midtown South,” Mr. Levine. “Until recently, I don’t think it’s an area that a lot of office tenants had really been thinking about.”