NoMad Meets RugLand Where Madison Square and Union Square Collide
Daniel Geiger Oct. 16, 2012, 7 a.m.
The area north of Madison Square Park has long been without an agreed-upon name and without a go-to tenant base.
Lately it’s being dubbed NoMad, and with this newfound recognition, it has become a draw for office tenants, especially those confounded by the boom in Midtown South, the greater neighborhood of which it is a part.
“There are a lot of tech companies and other tenants who are being pushed out of [prime] Midtown South [submarkets] right now because of the low vacancy rate and the high rents,” said Andy Roos, a leasing executive with Colliers International who owns and leases properties in the emerging area. “Now they’re starting to head north to NoMad.”
Mr. Roos said that tenants in the rug business and lingerie makers used to cluster in the area. High-end carpet sellers still occupy retail space along corridors such as lower Madison Avenue, but much of the office tenancy in the area is turning over to more lucrative takers.
Mr. Roos owns a building in the heart of the neighborhood, 136 Madison Avenue, which has been a benefactor of the activity. He, and Cushman & Wakefield executives Andrew Peretz and William Levitsky, recently arranged a 10-year, 18,400-square-foot deal with the public relations firm Sunshine Sachs & Associates for the building’s top floor.
According to Mr. Roos, two tenants are currently vying for the 20,000-square-foot second floor.
Mr. Roos owns another property in the vicinity, 38 East 32nd Street, which he said he could also find takers for if it had vacancy.
The buildings have benefited from the tight office neighborhoods to the south, such as Fifth Avenue below 23rd Street, Park Avenue South and the area surrounding Union Square.
Paul Amrich, a leasing executive with CBRE, said that tenants who are interested in Midtown South but have found space hard to come by are shopping for locations even further away than the rug district. Mr. Amrich is the leasing agent for two buildings, 1370 Broadway and 104 West 40th Street, which have both attracted a collection of tenants in recent months.
“A lot of media and tech companies are moving north from Midtown South and crossing the bowtie north of Herald Square,” Mr. Amrich said. “1370 Broadway is on 36th street, so it isn’t far.”
Earlier this year, Vox Media signed a nearly 17,000-square-foot lease for a space at 104 West 40th Street, which the building’s owners had purposely stripped down upon Mr. Amrich’s recommendation to create the chic, loft-like aesthetic of a Midtown South building.
“The space had exposed ceilings and polished concrete floors,” Mr. Amrich said. “Vox initially was looking only [at] Midtown South, but when they saw the space we had, they realized it was exactly what they were looking for.”
A few weeks later, fashion tenant Collection 18 has signed a lease for the top two floors at 1370 Broadway, 16 and 17, which total about 32,000 square feet.
Asking rents for that space were in the $50s per square foot.
“Tech, media and creative tenants are all very active right now,” Mr. Amrich said.