Insignia/ESG's Bill Hedman, Michael Geoghegan, Thomas Shirocky and Robert Makaron negotiated the 389,000-sf deal on behalf of L'Oréal USA. Sterling Equities, which owns and manages the building, was self-represented by Jeff Wilpon, Saul Katz and Michael Katz. Details of the lease extension, which takes effect in January 2006, have not been released.
Hair- and skin-care giant L'Oréal USA occupies nearly 80% of the 540,000-sf building's office space. Located at 47th Street and 5th Avenue, the property is 100% occupied. Other tenants in the 40-story tower include Barney's New York, McDonald Investment and Westpac Banking Corp.
According to Hedman, a senior managing director with I/ESG, the renewal talks began in third quarter 2000. "When you have close to 400,000 sf, there aren't that many options," he tells GlobeSt.com. "It's very difficult to find large blocks of space. If you wait until the end you'll have no place to go."
Hedman will not disclose any financial aspects of the transaction. "We came to a decision a couple of months back and made a deal that made sense to both parties."
Sterling Equities senior vice president Jeffrey Wilpon tells GlobeSt.com that the challenges of crafting a renewal for such a major tenant proved "about equal to [negotiating] a new lease." Dealing with L'Oréal, however, made the process "slightly easier, because we knew each other."
Wilpon, like Hedman, will not discuss financial details. "We were fair to them, they were fair to us," he says. He notes that while the new lease does not differ significantly from the current agreement, "we cleaned up some things that didn't work for them and didn't work for us."
L'Oréal USA executive vice president John Wendt says that a few alternative spaces "were put on the list of discussion topics," though he would not name specific properties. "We've been here for a number of years," he tells GlobeSt.com. "It's convenient, and while we see some expansion possibilities, all in all, it continues to be ideal."
Wendt also remains tight-lipped when it comes to the deal's cash component. "I think both parties are pleased with the price that was arrived at. Everybody came out a winner on this one."
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