Empire State Development to Save Millions in Lease Renewal
A 10-year lease renewal signed by Empire State Development at Time Equities’ 633 Third Avenue stands to save the agency $2.5 million. The 104,200-square-foot deal for floors 33 to 37 will see Empire State Development pay rents in the low-$60s per square foot, according to data from CompStak, down from rent in the mid-$80s per square foot.
The reduction in rent of approximately $24 per square foot will reduce Empire State Development’s yearly rent to $6.5 million through June 2016 from the previous annual rent of nearly $9 million, according to notes from an April directors meeting. Rents will increase to $68.50 per square foot, or just over $7 million per year, from July 2020 until the termination of the lease, but still represent considerable cost savings for the urban development corporation.
Simultaneously, Governor Andrew Cuomo’s office negotiated a 10-year renewal for its 39,254-square-foot space on the 38th and 39th floors at 633 Third Avenue. Starting rent was also in the low-$60s per square foot, according to CompStak data.
According to the April meeting notes, the New York State Office of General Services conducted a search for alternative space on behalf of Empire State Development and negotiated with Time Equities for a renewal at 633 Third Avenue. The lease includes an option to renew for an additional five years.
“The new lease OGS negotiated for ESD was a good deal that will result in millions of dollars in taxpayer savings,” a spokesman for Empire State Development said in a statement provided to The Commercial Observer.
Time Equities lowered rents as an incentive for both tenants to renew their respective leases, according to the Journal report. “We liked having them as [tenants] and wanted to keep them,” Francis Greenburger, chairman and chief executive officer, said.
Time Equities was represented in-house by Nadja Galloway and Brandon Medeiros.