IT’S the end of the year, and many large tenants in the market are holding off decision making – particularly those that have to give up space and buildings and don’t want the square feet booked as a loss this year.
Of course, many whopper tenants have a lot of rethinking to do about their own businesses before they even touch their real estate restacks.
CIBC, for instance, has brought in new leadership and is selling off divisions. But it does have a 1.1 million-square-foot commitment to Brookfield Financial for its new building at 300 Madison Ave.
Technically only 377,000 square feet are on the sublease market right now. But for several weeks, CIBC, whose broker is now Cushman & Wakefield’s Mitchell Konsker, was quietly debating not even occupying any of its sleek new tower. Even Pfizer, repped by Josh Kurlioff, also of Cushman & Wakefield, has taken a ruler through the building; the drugmaker has also been sniffing out the $25-a-foot Aon space at 685 Third Ave. and negotiating with Fisher Bros. for a new tower on the Con Ed site.
Now, however, the question internally for CIBC appears to be centered on how much will they occupy, rather than what they will give up. CIBC may remain at its post-9/11 emergency locations of 417 Fifth Ave. and 622 Third Ave., but its discussions with Brookfield have also included moving portions of the company back downtown to the World Financial Center – from whence they came before 9/11.
Along with companies like HIP and the Oppenheimer Funds, CIBC has also made serious stabs at downtown’s “it” building, 55 Water St.
Despite the best efforts of its Insignia/ESG brokers David Bernstein and Rob Stillman, Clifford Chance Rogers & Wells can’t seem to get out of its own poorly merged way and is killing deals on two other buildings.
The law firm was hot on the Macklowes’ redo of 340 Madison Ave. but wanted the middle floors of that building. That meant Brian Cave, now at the Chrysler Building and being walked around town by Ira Schumer of Julien J. Studley, would simply have to twiddle its thumbs or look elsewhere – all while being wooed by Chrysler owners Tishman-Speyer to remain in place.
Clifford Chance is also negotiating for portions of the former Andersen space at Times Square Tower. But the firm came in dead last in American Lawyer’s 2002 survey of the worst places to work for associates, and now a major rainmaker has walked out with a group of lawyers.
The firm also has too many years to go on its lease at 200 Park Ave. to make a fast move, but not enough to lease to anyone else, all of which has left the firm treading water with open hands.
Meanwhile, Pillsbury Winthrop, led by new Studley chairman Mitchell Steir, was thought to be a white-shoe-in at Times Square Tower – but it has now also taken spins through the former Random House space Bertelsmann has up for lease at 1540 Broadway, along with Deutsche Bank’s 500,000 square feet at 31 W. 52nd St.
Under the wing of Staubach’s Robert Bundy, O’Melveny & Myers is also negotiating at Times Square Tower.
Tim Tompkins, president of the Time Square BID, credits the upsurge in tenant interest not just to availabilities but also because “Times Square feels safer than ever.”
*
Overly gentrified SoHo has lost another gallery.
The aptly named Exit Art has already packed up its works from its longtime home at 548 Broadway at Spring Street and moved temporarily to an upper floor at 475 Tenth Ave., on the northwest corner of 36th Street, while its new ground-floor gallery is being built out.
If you think that’s an unremarkable location – on the edges of Chelsea, the Garment Center and Times Square – think again. The 259,000-square-foot building is populated by some of the smartest nouveau neighborhood finders, ranging from hipster hotelier Ian Schrager to scalpel-edged architects Richard Meier and Charles Gwathmey.
“It’s what they saw happening in SoHo a decade ago,” explained Alan Grossman of the Georgetown, who acted as owner Robert Liberman’s consultant. Gary Alterman of Newmark New Spectrum was the building’s broker, while Steve Eynon of Insignia/ESG repped Exit Art for the 10-year deal with options.
“The owner saw Exit Art as a benefit to the neighborhood,” added Alterman. “There are also substantially lower rents than in SoHo and West Chelsea.”