Insignia/ESG's Alan Desino, Richard Karson, and Robert Stillman arranged the transaction on Vollmer's behalf, while in-house broker Steve Durels represented building owner SL Green in negotiating the 47,000-sf space at 50 W. 23rd St.
Vollmer, which occupies the entire eighth floor of the 110-year-old building's and part of the seventh, had been paying rent in the mid-$30s per sf for its space under the old agreement. While the new rent has not been disclosed, a source close to the deal tells GlobeSt.com that a major component of the transaction is a cash contribution from S.L. Green valued at between $15 and $20 per sf.
Insignia's Desino tells GlobeSt.com that his client's decision to restructure the 23rd Street lease was the result of an exhaustive market analysis. "We did an entire evaluation," he says. "We looked at Downtown, at New Jersey and Long Island" as well as the outer boroughs. Insignia also presented Vollmer with split-office scenarios and "after we did all that, [S.L. Green] came to the table and was pretty aggressive to keep them in the building."
Desino notes that the biggest challenge his team faced when negotiating the new lease was an initially reluctant building owner who didn't see the advantage of renegotiating Vollmer's lease three years early in the midst of a down market. But, once the numbers were crunched, it became apparent that Vollmer held a winning hand. "We said, 'We'll just move them.' We could have sublet the space and the loss would have been immaterial," Desino tells GlobeSt.com. "That's what created our leverage."
"At a time when there's a plethora of sublease space available in the City, and asking rents are highly negotiable, we encouraged our client to re-commit for a long term thereby securing a cost effective rent," adds Karson.
Built in 1892, 50 W. 23rd St. is a 14-story office property with 302, 408 sf of leasable space. Commercial tenants in addition to Vollmer include the New York office of naval architecture and marine engineering firm Gibbs & Cox Inc., military and commercial aerospace technology firm Israel Aircraft Industries Ltd. and the local offices of Hong Kong-based Playmates Toys Inc.
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