SL Green Inks Viacom to 1.3M-SF Lease at 1515 Broadway in Manhattan

Viacom has decided to keep its global headquarters at 1515 Broadway in Times Square, renewing and extending its lease for 1.3 million square feet of space at the 54-story Midtown Manhattan skyscraper that is home to MTV studios and the Nokia Theater. SL Green, the commercial real estate firm that co-owns the building with SITQ of Canada, said Tuesday it is the third largest lease in Midtown Manhattan history. The lease renewal through 2015 includes 1.1 million square feet that was to expire in two years along with an extension of 170,000 square feet that was to expire in 2012 and 2013. “It’s a huge deal and it sends a great signal out to the community in general that no matter what’s going on in the economy, if you have a lease expiration coming up and have a great deal, go ahead and make the deal,” Corey Abdo, executive vice president with Winoker Realty Co. in Manhattan, told CPN. Abdo, who was not involved in the deal, called the lease renewal a “home run for SL Green” even though they likely had to make some concessions to keep the media conglomerate there. Viacom had reportedly been paying in the low $50s per square foot for its space before the renewal. SL Green recently signed new leases at the tower for between $83 and $85 per square foot. As CPN reported Oct. 28, Wurk Environments L.LC. signed a new 10-year lease for 64,800 square feet at the building taking the previously vacant 11th and 12th floors. With Viacom keeping its space, the building will maintain at least 95 percent occupancy for at least the next several years. 1515 Broadway (pictured) is undergoing a $160 million capital improvement program that includes a new façade, new lobby and upgrades aimed at getting a Silver LEED certification. Steve Cuozzo reported in the New York Post that Viacom was reportedly unhappy with the ongoing renovations at the skyscraper and that Viacom executive chairman of the board Sumner Redstone was eyeing cheaper space downtown at 345 Hudson St. “SL Green’s stance has been ‘we don’t care whether they stay or leave,’ but they had to have some concern,” Abdo said of Viacom’s search downtown. “It was hard fought, but it was the right result,” he added, offering congratulations to all those involved in the lease negotiations. Michael Langinestra, Scott Gottlieb and Andrew Sussman of CB Richard Ellis Inc., and the legal team of Chris Smith and Laura Chirita from Shearman & Sterling L.L.P. represented Viacom. SL Green was represented in-house by executive vice presidents Steven Durels and Neil Kessner as well as Kathy Crocco, senior vice president. Attorneys Stuart Mass and Noah Shapiro of Paul, Hastings, Janofsky & Walker L.L.P. provided legal services to SL Green. SL Green and SITQ, a Canadian real estate investment firm, bought 1515 Broadway in 2002 for about $480 million. In November, 2005, the joint venture recapitalized the building and obtained a $625 million, three-year loan. At that time, the skyscraper was appraised at $1 billion. “For more than a decade Times Square has been the epicenter of corporate resurgence in Manhattan and 1515 Broadway stands prominently at this ‘Crossroads of the World’. Along with our joint venture partner SITQ, we are extremely pleased that Viacom, which has been a longtime Midtown anchor and valued tenant, will continue to call 1515 Broadway its home,” Marc Holliday, SL Green CEO, said in a statement. Holliday added that the transaction will save over $200 million in potential retenanting costs. He noted that SL Green “continues to outperform its leasing objectives in a challenging economic climate.” Holliday said the company has reduced the amount of square footage of leases expiring over the next two years by approximately 30 percent. In addition to the Wurk Environments lease at 1515 Broadway, CPN also reported Oct. 28 that SL Green had announced three other lease transactions that month, including News America Inc. expanding its space at 1185 Avenue of the Americas with a 12-year lease for 54,500 square feet. Two leases totaling 51,900 square feet were also signed at 750 Third Avenue, the company said. “It sends a strong signal that the New York real estate market is healthy, that the foundations are still there, though in recent months we have all seen a pause in leasing activity,” Adbo said. “I hope that other tenants in the neighborhood and throughout the city will take this as a positive sign.”