After Success at 645 Madison, TF Cornerstone Has Similar Plans for 387 Park Avenue South
Daniel Geiger Sept. 28, 2012, 2:59 p.m.
CBM Capital has renewed its lease at 645 Madison Avenue, a 2,500-square-foot space on the building’s sixth floor, for rents in the mid $80s per square foot. The renewal, which is for a portion of the floor, will stretch for three years and is the latest in a string of high priced deals at the tower.
Earlier in September, the financial firm Marble Arch Investments, took the building entire 17th floor, a nearly 7,000-square-foot space in a seven-year deal with asking rents that topped $100 per square foot. Before that, Banco Pine, a Brazil-based bank, took 3,000 square feet on the 22-story building’s ninth floor for rents in the high $70s per square foot.
The deals at the roughly 200,000-square-foot tower, which is owned by the real estate investment and development firm TF Cornerstone, stand out during a lull in leasing activity throughout Midtown, a slow period that has also mired dealmaking for upper tier space.
TF Cornerstone renovated 645 Madison Avenue a little over five years ago, improvements that have helped it differentiate the tower in a market with plenty of space options for tenants. The company is preparing a similar strategy for 387 Park Avenue South, a 12-story, 215,000-square-foot building the firm owns in the ultra-hot Midtown South neighborhood.
TF Cornerstone is planning a sweeping overhaul of the property that will replace 387 Park Avenue South’s lobby and elevator systems. The company will also install a glass facade on the property’s lower floors in a move to improve the value of its retail and base office space. A roof deck will also be built to create a communal space and an amenity for the building’s tenants.
In a statement, Fred Elghanayan, president and co-founder of TF Cornerstone, said the renovation work would create a “‘new’ 387 Park Avenue South.
“When we first acquired the building we put in motion a leasing program designed to provide the flexibility required to completely reposition 387 Park Avenue South,” Mr. Elghanayan said, referring to recent lease rollover that has largely emptied the property. Only TF Cornerstone itself has space in the building for its own offices, but the company has signaled to prospective tenants that it would relocate in order to accommodate space takers who would need its floors.
Midtown South has the lowest vacancy rate in the city and, driven by demand and a lack of space, its rents are fast rising.
“387 Park Avenue South will help us cement our position as a premier owner in the bustling and rapidly evolving Park Avenue South corridor,” Palmer “Chip” Sealy III, vice president of commercial leasing for TF Cornerstone, said in a statement, suggesting how the company has been keenly aware of the economic bounty that awaits owners with well-conceived real estate projects that cater to the increasingly expensive tastes of tenants in the area .
TF Cornerstone has hired a leasing team from the services firm Newmark Grubb Knight Frank led by Matthew Leon, its leasing agent at Carnegie Hall Tower and 645 Madison Avenue, and David Falk, Newmark’s New York area president, to market 387 Park Avenue South.
“Having two dramatic new elevator lobbies and an unparalleled roof deck allows 387 Park Avenue South to offer the perfect home for a tenant seeking a headquarters opportunity and all the branding associated therewith,” Mr. Falk said in a statement.