Jones Lang LaSalle
Seagram, Lever towers exert pricey pull on Park
Architectural gems enthrall financial firms; rents are formidable
By Fran Hawthorne
Published on May 15, 2006
Officials from hedge fund HomeField Capital looked at 20 potential Manhattan office spaces when they were setting up their business last year. "At the end of every tour, they wanted to go back to revisit the Seagram Building," says Evan Margolin, an associate director at Studley who is HomeField's broker.
The firm eventually leased 5,000 square feet at the property for around $95 per square foot. It could have gotten perfectly lovely, less expensive space elsewhere, Mr. Margolin says, "but there's a prestige associated with being in that building.
Even among the loftiest of upper-crust buildings, almost nothing rivals the Seagram Building, at 375 Park Ave., and its neighbor across the street, Lever House, at 390 Park Ave. No other New York City office towers boast the combination of a prime Park Avenue address in the East 50s and classic modernist design. As a bonus, Lever House has landmark status.
Snob appeal
Factor in more than $50 million worth of renovations and stunning artwork in the lobbies and plazas, and you have two exceptional buildings. True, the stratospheric rents and tiny floorplates scare off some prospective tenants. But that fact only seems to add to the cachet for the ultrawealthy financial boutiques that lease most of the space in the properties.
"These are real architectural gems that have stood the test of time," says Benjamin Friedland, a first vice president at CB Richard Ellis.
Although the two buildings have been standing since the 1950s, they didn't become really hot properties until RFR Holding bought them in 1999 and 2000 and began major renovations. Among other things, RFR restored the green glass facade at Lever House and added a trendy restaurant, replaced old bathrooms and hallways at Seagram, and updated the telecommunications and wiring at both buildings.
In addition, RFR principal Aby Rosen says, he spends more than $150,000 a year on landscaping and a couple of million dollars annually for original artwork. Right now, a 34-foot-tall bronze statue by Damien Hirst towers over one of Lever's outside plazas.
Adding to the buildings' luster is the scarcity of quality space in the neighborhood, and tenants' newfound interest in historic properties. "People appreciate landmarks today. They didn't used to," Mr. Rosen says.
As a result, the 300,000-square-foot Lever tower is always fully occupied, while Seagram, at 820,000 square feet, is usually 98% to 99% occupied. Many of the tenants are small financial firms such as HomeField, for which the floorplate sizes--about 11,000 square feet at Lever House and 17,000 at Seagram--are just right.
Firms of a feather
Yet another inducement for these firms, says Mitchell Konsker, an executive vice president with Cushman & Wakefield Inc., is that the neighborhood is lined with financial stalwarts such as Citigroup, Bear Stearns and J.P. Morgan Chase.
That's one reason Wachovia Corp. recently signed deals for space at Seagram totaling 250,000 square feet, says Mr. Konsker, the co-agent on the transactions. "What would your clients think," he asks hypothetically, "if all your competitors are on Park Avenue and you're on Sixth Avenue?"
With his properties in such hot demand, Mr. Rosen can be a ruthless bargainer, some brokers complain. During HomeField's negotiations, "RFR maintained a hard stance about not reducing rents," Mr. Margolin recalls. "Most landlords would negotiate a little more."
One broker says RFR even raised the rent in the middle of recent negotiations.
Mr. Rosen remarks that if he seems tough, it's with good reason.
"I want the right thing for the buildings," he says. "I want my pricing; I want good-quality tenants."
They don't seem all that hard to find. In the few months since HomeField and Wachovia signed, rents have soared to as high as $140 per square foot from the mid-$90s.
Seagram, Lever towers exert pricey pull on Park
Architectural gems enthrall financial firms; rents are formidable
By Fran Hawthorne
Published on May 15, 2006
Officials from hedge fund HomeField Capital looked at 20 potential Manhattan office spaces when they were setting up their business last year. "At the end of every tour, they wanted to go back to revisit the Seagram Building," says Evan Margolin, an associate director at Studley who is HomeField's broker.
The firm eventually leased 5,000 square feet at the property for around $95 per square foot. It could have gotten perfectly lovely, less expensive space elsewhere, Mr. Margolin says, "but there's a prestige associated with being in that building.
Even among the loftiest of upper-crust buildings, almost nothing rivals the Seagram Building, at 375 Park Ave., and its neighbor across the street, Lever House, at 390 Park Ave. No other New York City office towers boast the combination of a prime Park Avenue address in the East 50s and classic modernist design. As a bonus, Lever House has landmark status.
Snob appeal
Factor in more than $50 million worth of renovations and stunning artwork in the lobbies and plazas, and you have two exceptional buildings. True, the stratospheric rents and tiny floorplates scare off some prospective tenants. But that fact only seems to add to the cachet for the ultrawealthy financial boutiques that lease most of the space in the properties.
"These are real architectural gems that have stood the test of time," says Benjamin Friedland, a first vice president at CB Richard Ellis.
Although the two buildings have been standing since the 1950s, they didn't become really hot properties until RFR Holding bought them in 1999 and 2000 and began major renovations. Among other things, RFR restored the green glass facade at Lever House and added a trendy restaurant, replaced old bathrooms and hallways at Seagram, and updated the telecommunications and wiring at both buildings.
In addition, RFR principal Aby Rosen says, he spends more than $150,000 a year on landscaping and a couple of million dollars annually for original artwork. Right now, a 34-foot-tall bronze statue by Damien Hirst towers over one of Lever's outside plazas.
Adding to the buildings' luster is the scarcity of quality space in the neighborhood, and tenants' newfound interest in historic properties. "People appreciate landmarks today. They didn't used to," Mr. Rosen says.
As a result, the 300,000-square-foot Lever tower is always fully occupied, while Seagram, at 820,000 square feet, is usually 98% to 99% occupied. Many of the tenants are small financial firms such as HomeField, for which the floorplate sizes--about 11,000 square feet at Lever House and 17,000 at Seagram--are just right.
Firms of a feather
Yet another inducement for these firms, says Mitchell Konsker, an executive vice president with Cushman & Wakefield Inc., is that the neighborhood is lined with financial stalwarts such as Citigroup, Bear Stearns and J.P. Morgan Chase.
That's one reason Wachovia Corp. recently signed deals for space at Seagram totaling 250,000 square feet, says Mr. Konsker, the co-agent on the transactions. "What would your clients think," he asks hypothetically, "if all your competitors are on Park Avenue and you're on Sixth Avenue?"
With his properties in such hot demand, Mr. Rosen can be a ruthless bargainer, some brokers complain. During HomeField's negotiations, "RFR maintained a hard stance about not reducing rents," Mr. Margolin recalls. "Most landlords would negotiate a little more."
One broker says RFR even raised the rent in the middle of recent negotiations.
Mr. Rosen remarks that if he seems tough, it's with good reason.
"I want the right thing for the buildings," he says. "I want my pricing; I want good-quality tenants."
They don't seem all that hard to find. In the few months since HomeField and Wachovia signed, rents have soared to as high as $140 per square foot from the mid-$90s.
posted by Jones Lang LaSalle NJ News Blog at 10:32 AM
<< Home