565,000SF Manhattan Building to Become Ogilvy’s New Global HQ

In what’s presumably the biggest office lease so far in 2008–and likely to still be one of the biggest at year’s end–marketing and advertising giant Ogilvy has signed a lease for the entire 11-story, 564,800-square-foot building at 636 Eleventh Avenue on Manhattan’s West Side. The building, completed in 1913 and originally a chocolate factory, will become home for all of Ogilvy’s New York–based companies, including Ogilvy & Mather Advertising. Ogilvy expects to move into the building in 2009.A spokesperson for The Hakimian Organization, the building’s owner, along with Peykar Brothers Realty and Gorjian Properties, said that Hakimian had bought the building in 2095. Cushman & Wakefield Inc. vice chairman Mitchell Konsker, who represented Hakimian in the negotiations, told CPN today that 636 Eleventh Avenue had been a headquarters and telecom hotel for Global Crossing, but more recently has been vacant for several years. Hakimian, he explained, had originally envisioned converting the building to residential use, but about 15 months ago Kosker, foreseeing a demand for large blocks of office space, persuaded them to market the building as office space instead. “(The Ogilvy lease) is like Cravath (top-drawer law firm Cravath, Swaine & Moore L.L.P.) going to Eighth Avenue,” Kosker said. “This transaction legitimizes Eleventh Avenue as a corporate corridor.” A source close to the transaction reported that Ogilvy’s rent is in the “low $50s.” According to just-released fourth-quarter figures from Cushman & Wakefield, average asking rents in the West Side (Seventh Avenue to the Hudson, and 42nd Street to 57th Street) are $77.16. That submarket, according to the same Cushman report, has a 4.0 percent vacancy rate on a total of 25 million square feet of office space. Cushman’s Konsker, along with Cushman executive vice presidents Paul Glickman and Jack Cohen, represented Hakimian, and Ogilvy was represented by Gregory Tosko and Casey Hirschhorn of CB Richard Ellis Inc. Because it was originally built as industrial space, the building features high ceilings and open floorplates; it also has a courtyard and a rooftop terrace, which Ogilvy plans to redesign as a garden space. Gensler Architects will redesign the building’s entrance and lobby and create a new core plan. The building’s core and shell work, according to Hakimian owner & operating manager Ben Hakimian, will also include new windows, mechanicals, bathrooms and elevators. Two of the nine new elevators will be extended to the roof, for access to the planned rooftop garden. Hakimian, who spoke with CPN today, declined to disclose a dollar amount for this renovation, but noted that in addition to pulling the building up to Class A status, the work will bring LEED certification. In addition to office, residential and hotel developments, infrastructure improvements in the West Side submarket include a planned expansion of the Javits Center and an extension of the Number 7 subway line. Kosker noted that luxury/boutique hotelier Kimpton is under way on a new hotel just a block north of the new Ogilvy building.