Health Management Associates Relocating Across the Street in Theater District
By Aaron Short July 12, 2023 10:50 am
reprints
Sometimes the grass is greener on the other side — and it’s cheaper, too.
Health Management Associates (HMA), a Michigan-based health care consulting firm, is swapping its 1133 Avenue of the Americas office for a newer one across the street that happens to be owned by the same landlord, according to the building owner and the tenant’s broker.
The research firm, which has 577 employees in 20 offices across the country, had embraced hybrid work and needed a slightly smaller space that would still be a welcoming place for its New York-based consultants to work in person.
Fortunately, its landlord, The Durst Organization, had an alternative available on a higher floor across the street in 1155 Avenue of the Americas. HMA was able to build out the 7,217-square-foot office to its specifications. And it even cost less than its former satellite, although both parties declined to reveal the specific terms of the lease. (Average asking rent in the neighborhood was $77.12 per square foot in the second quarter of this year, according to Savills.)
“They downsized a little but they upgraded their space quality substantially,” Armano Real Estate CEO Joseph Armano, who represented HMA, said. “They’re picking up a higher quality space at a lower total budget. It’s a little higher in price-per-square foot but they’re taking in less per square footage.”
Durst handled the deal in-house via Rocco Romeo.
The 42-story Emery Roth & Sons-designed tower was built in 1984 and was the first building in the city to receive a LEED Gold rating for operations and maintenance of an existing building, according to Durst.
Durst recently finished a $130 million renovation of the property to bring more light into its lobby, revamp security desks and turnstile systems, and upgrade its West 44th Street entrance. Its lighting design was recognized by the American Institute of Architects.
The upgrades have attracted several new tenants including the global investment firm Francisco Partners, law firm Jenner & Block and financial services company CLSA. Even the Durst Organization is moving its headquarters there from its recent home at One Bryant Park.
But the Midtown office market’s outlook is far from rosy. The amount of vacant office space in Manhattan hit an all-time high at 70 million square feet during the second quarter of the year, while leasing fell 25 percent compared with the second-quarter average before the pandemic, a Savills report found. The office availability rate is the highest it has been since 2017, continuing a long-term softening of the market.
Tenants have been able to take advantage by finding deals in higher-quality buildings. But don’t feel too bad for Durst. The developer reportedly already filled HMA’s old office with another tenant.
