RXR Signs NNN Lease for Manhattan’s 75 Rockefeller Plaza
- Jan 28, 2013
Big plans are in the works for 75 Rockefeller Plaza in Midtown Manhattan, now that owner 75 Plaza L.L.C. has turned over a leasehold interest to RXR Realty under a 99-year, triple-net lease agreement, the financial terms of which have not been disclosed. Presently occupied by Time Warner Corp., the 66-year-old office building will be transformed into a Class A gem at the hands of 75 Plaza’s new operating partner.
It’s all in the timing. Time Warner’s net lease agreement at the 630,000-square-foot property in Rockefeller Center is due to expire in 2014, and after having decided to commence a re-leasing program earlier, 75 Plaza, with the guidance of commercial real estate services firm Cushman & Wakefield Inc., ultimately thought better of it. C&W recognized the benefit of taking a different tack at the symbolic, 33-story tower that was originally known as the Esso Building.
“I like their timing for the market; as they look to renovate I think it’s going to be in a more high-demand marketplace,” Bruce Mosler, chairman of global brokerage with C&W, told Commercial Property Executive.
Current numbers may not serve as a shining indication of an immediate spike in demand–the vacancy rate went on a bit of an upswing year-over-year, going from 9.1 in 2011 to 9.4 percent in 2012–but improvement is afoot, per a C&W report.
“By 2014, the market will have rebounded,” Mosler said. “As we go in to 2013 we expect to see more demand entering the marketplace because, notwithstanding that the financial services market is stagnant, I think [financial services] will rebound as they get more clarity–seeing European debt resolved and as we clear up some of the issues in the U.S. like the debt ceiling cap and the budget, which have prevented executives from making decisions. I think we’ll see confidence return.”
Additionally, Mosler anticipates that 75 Rockefeller will attract a great deal of attention once it emerges from its makeover. “First off, it’s an iconic building and we expect interest to be very heavy in the international sector because of its iconic address,” he added. “And number two, we expect it to be attractive to existing U.S. global brands that are also looking for an iconic address. Rockefeller Center, independent of the marketplace, has always been a place that outperforms the general market because it has historically been attractive to both international and national tenants.”
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