After flirting with the idea of a new World Financial Center address, accounting giant KPMG helped stabilize the Midtown market with a commitment to remain in its 345 Park Ave. headquarters for the next 20 years.
“The fact they are absorbing a substantial amount of space is good news,” said Gil Robinov of Murray Hill Properties. “But one deal does not turn around the Midtown market. It’s a wonderful transaction and on its heels there are other large tenants that will be announcing their deals soon.”
According to Newmark’s year-end report, Midtown’s availability climbed from 12 percent to 12.9 percent during the fourth quarter, while the year ended with 7.38 million moresquare feet of leases given up than signed.
Bill Rudin, president of Rudin Management – which owns the 1.8 million-square-foot Class A office tower – told The Post that Rudin has an “agreement in principle” to renew the KPMG lease of approximately 250,000 square feet, with several future options for expansion to as much as 400,000 square feet.
Broader concerns were the primary reason for KPMG staying put.
“We took into consideration the needs of our clients and employees, and this is the culmination of an entire review of the New York office market, both inside and outside the city,” said KPMG spokesman George Ledwith.
There firm got no incentives from either the city or state, he added.
No pricing details were revealed, but asking rents for the two floors available in the building were $59 and $64 a foot, according to CoStar industry data.
Rudin, who is also chairman of the Association for a Better New York – founded by his late father, Lewis – and owns office properties in the Wall Street area, said the deal shouldn’t be seen as a downtown downer.
“We focused on renewing our tenant for that block of space,” Rudin said. “The competition for space is not just downtown, but is across the street or across the river in New Jersey. All the things we need to do to make Lower Manhattan competitive still need to be done.”
KPMG has had its U.S. headquarters at 345 Park since 1968, when a lease was signed with Rudin’s grandfather, Samuel. The family’s long-standing relationship with KPMG eventually became the key that sealed the new deal.
KPMG is being represented in its lease negotiations by an Insignia/ESG team led by Bob Alexander of Insignia/ESG and Patrick Murphy, now with CB Richard Ellis; Tom Keating led Rudin’s team of in-house reps.