SL Green, Vornado Fill 100 KSF at 280 Park Ave. in NYC
- Apr 25, 2013
SL Green Realty Corp. and Vornado Realty Trust recently locked in two tenants to occupy two full floors at Manhattan’s 280 Park Ave., the 1.2 million-square-foot office tower that the co-owners are presently redeveloping to the tune of $125 million. Blue Mountain Capital and Promontory Financial Group L.L.C. signed leases totaling nearly 100,000 square feet at the property, which is being reinvented as a top-of-the-line, state-of-the art office destination.
Businesses in the financial industry appear to be quite keen on 280 Park, located in the Grand Central Terminal submarket. They have their reasons. “[You have a] world-class redevelopment, large 50,000-square-foot floor plates in base, and 20,000-square-foot tower floors are ideal sizes,” Steven Durels, executive vice president and director of leasing and real property with SL Green, told Commercial Property Executive. “And there is limited supply of available space anywhere on Park Avenue.”
Blue Mountain entered into a 10-year lease agreement, committing to the entire 12th floor of the 43-story building. The asset manager already calls 280 Park home, as it currently occupies approximately 22,300 square feet on the 40th floor under a short-term lease.
Promontory, presently Blue Mountain’s neighbor on the 40th floor, also expanded its occupancy at 280 Park with a 10-year lease agreement. And the risk management consulting firm will stay close to Blue Mountain when it sets up shop in every square foot on the11th floor, marking a notable increase from its current 19,500-square-foot digs occupied under a short-term lease.
With the Blue Mountain and Promontory agreements, 280 Park is now 62 percent leased. It’s not the highest number but the increased leasing activity at 280 Park over the last year belies the current state of the Grand Central submarket. According to a report by commercial real estate services firm CBRE Group Inc., which represented the property owners in the transaction, Grand Central experienced negative absorption totaling 940,000 square feet in the first quarter of 2013.
Regardless of any recent ups and downs in the various submarkets, Manhattan remains one of the strongest office markets in the country and its future continues to look bright. “Tenants are more confident in the direction of the economy now that we’re past the presidential election, the budget/tax issues are beginning to be dealt with by Congress, corporate profits are strong, stock market at record levels, employment gains have continued for an extended period and the Euro debt crisis has been resolved,” Durels said. “Consequently tenants are investing in their businesses for long term growth and making real estate decisions accordingly.”