NYU Langone Leases Entire Manhattan Office Tower
- May 02, 2016
New York–NYU Langone Medical Center has signed a 30-year lease with Columbia Property Trust Inc., to take the entire space of its 25-story office tower at 222 E. 41st St., in Manhattan.
“Manhattan, and notably the Midtown submarket, continues to fuel strong demand for space of the quality that this building offers, and this new location for NYU Langone will be an expansion of their primary facility that is located only a few blocks away,” Nelson Mills, Columbia Property Trust’s president and CEO, told Commercial Property Executive. “In addition to the building’s location, NYU Langone was attracted to 222 E. 41st St., for its newer construction and efficient open floor-plates that will be especially valuable as they undertake a transition of the building from full office use to a medical and ambulatory center.”
In total, the triple-net lease encompasses 389,522 square feet of Class A office space at the building, including all 25 floors and the lobby, common areas and parking garage.
“When we first began marketing the space, we thought that transitioning the building to a multi-tenant format might be the most efficient way to replace occupancy and income at the building,” Mills said. “However, we were always open to the idea of a compelling single-user opportunity, and securing a highly-respected and creditworthy tenant like NYU and its Langone Medical Center while re-occupying the full building with almost no downtime is an ideal outcome for us.”
Originally built in 2001 and acquired by Columbia Property Trust in 2007, the building is in close proximity to Grand Central Terminal.
Plans are for NYU Langone to convert the building into a combination of medical offices, ambulatory care facilities and other ancillary uses, which will require a significant amount of capital investment.
“Columbia will be investing approximately $140 per square foot in tenant improvements, and NYU Langone has indicated they expect to spend considerably more per square foot of their own capital to achieve the conversion,” Mills said. “However, we believe this type of investment is merited in light of the lease being a 30-year initial term, with two extension opportunities, and the building’s construction and infrastructure are well-suited to accommodate this type of transition.”
NYU Langone is expected to take possession around year-end 2016, following the October 2016 expiration of Columbia Property Trust’s lease with law firm Jones Day for 353,541 square feet in the building.