Manhattan Scores 2010’s Biggest Office Lease
- Dec 16, 2010
December 16, 2010
By Barbra Murray, Contributing Editor
Landing a half-million square-foot lease in the current U.S. office market is no simple accomplishment in any metropolitan area, but Brookfield Office Properties has done just that at 245 Park Ave., its 1.7 million square-foot Class A office and retail tower in Midtown Manhattan. In the largest lease transaction of 2010 to date, the company closed a deal with Société Générale, which committed to 444,000 square feet for the relocation of its U.S. headquarters.
Société Générale will end its two-decade stay in its current digs at 1221 Avenue of the Americas for a new home on floors 3 through 12 at 245 Park Ave. in mid-2013. Known at various times as the American Tobacco Co. Building, American Brands Building and Bear Stearns Building, the 44-story high-rise made its debut in 1967 and underwent a multi-year renovation that concluded in 2000. The building also has 68,000 square feet of retail space and a tenant roster featuring the likes of Major League Baseball, Rabobank, management investment company Ares Capital Corporation, law firm McCarter & English and JPMorgan Chase. Just last month, the building was refinanced to the tune of $800 million when Brookfield scored a loan from the Bank of China in one of Manhattan’s largest loans this year.
Société Générale’s 20-year lease agreement is multifaceted, as the global financial services company will actually sublease the space from JP Morgan Chase for about 10 years, after which point it will lease the space directly from Brookfield. CB Richard Ellis stood in for the tenant in the transaction, while the landlord relied on internal representation. The deal also gives Société Générale the option to substantially expand its occupancy at 245 Park Avenue down the road.
So what does such a gargantuan lease mean for the New York City office market? “It is indicative of a change in the market in that large space users–having put off decisions for the last 12 months–are feeling a renewed confidence in their business and are making major moves and investments,” Dennis Friedrich, President & CEO of U.S. Commercial Operations for Brookfield, told CPE. “Basically, large users are coming back to the market and tenants are looking to relocate to better assets. And the Société Générale lease is a great sign.”