George Twill, president of CSFB Realty Corp., created recently through the merger, tells GlobeSt.com CSFB has entered into an assignment of lease with Chase for the space at 277 Park Ave. "This deal was done in parallel with our negotiations at 1 Madison Ave. This puts us in a building connected to our world headquarters at 11 Madison Ave. and it puts Chase near some of their other space in the Grand Central District, so it's a benefit to us both."
Twill, Raj J. Vakharia, Drew F. O'Malley and Louis R. Buffalino of CSFB Realty Corp. represented CSFB and Bob Alexander and Lewis Miller of Insignia/ESG represented Chase in the transaction. The precise terms of the agreement were not disclosed.
Insignia/ESG also represented Chase in its July signing of a 20-year lease for the entire Newport Office Center V and VI in Jersey City, NJ, which is still under construction and will not be ready for occupancy until 2002. Chase has also signed for parts of the first and second and all of the basement floors at 280 Broadway for retail space. A 20-year lease was signed in November for 580,160 sf at 245 Park Ave. and Insignia/ESG brokers confirm Chase headquarters will remain at 270 Park Ave.
With the acquisitions of space concerns about mass layoffs and closures have quieted of late. Rumors still abound though about 55 Water St. as the time on the lease runs out. Officials with Chase decline to comment on this or J.P. Morgan's building at 60 Wall St. or the space they maintain at 522 Fifth Ave. and 345 Park Ave.
Since CSFB and DLJ announced their merger, CSFB likewise has been announcing expansions. In December CSFB signed for 114,602 sf at 11 Madison Ave., bringing its total lease there to 1.9 million sf. It also expanded at 5 World Trade Center with 66,448 sf, bringing the lease to 180,000 sf. The company leased 264,618 sf at 315 Park Ave. across the street from its Madison Avenue headquarters.
"We're still in the evaluation stages," Twill says. "Our post-merger challenge is to consolidate space throughout the country and this will take a good part of a year or more. My charge is to assure the company has adequate space and we are doing strategic planning for real estate up to and including the acquisition at 1 Madison Ave."
In response to those who may question entering into major real estate deals now when the market may soften more favorably for better rates later Twill says, "With the size and strength of CSFB or Chase, I don't think that necessarily effects our ability to enter into a deal such as this. A lot of this is the fallout of new economy companies. We're old economy.
"A lot of the spiraling increase in rent we were seeing will end, and a softening will restore us to normal rental rates," he concludes. "There will be some downward adjustment, but this is not seen yet, nor do I expect it to be a dramatic adjustment."
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