Laurus, which has $800 million under management, has taken the space in a sublease from Morgan Stanley. Although the terms of the deal were undisclosed, the asking price for the space was $51 per sf.
Michael Kaufman and Jack Wynne of Kaufman/Adler Realty negotiated the deal for Laurus. "Prices in the Plaza District have risen significantly over the past several years," Kaufman says. "825 Third Ave., however, offers clients prestige, but at reasonable rates not found in most other buildings in the area." Phil Sprayregen of Byrnam Wood represented Morgan Stanley.
The site is owned by the Durst Organization and CB Richard Ellis is the managing agent. Other tenants include the Royal Norwegian Consulate General and La Maganette restaurant.
And following the trend of law firms taking large amounts of space with room to grow, McDermott Will & Emery has leased approximately 160,000 sf of headquarters space at 340 Madison Ave. The 15-year transaction marks the first major tenant to sign on at Macklowe Properties' redesigned and redeveloped 22-story, 750,000-sf tower. The firm intends to relocate from 50 Rockefeller Plaza, where it presently occupies approximately 100,000 sf, by the end of the year and will have options to expand into an additional 110,000 sf. Financial details of the deal were not disclosed; however, a source close to the deal tells GlobeSt.com that space is the site averages at $60 per sf.
Studley chairman and CEO Mitchell S. Steir, who together with executive managing director Howard Nottingham, executive vice president Matthew Barlow and executive managing director David Goldstein represented McDermott Will & Emery. Macklowe was represented by Edward Weiss, Tara Stacom. Robert Thuss and LeRoy Wilde of Cushman & Wakefield Inc., the building's exclusive leasing agent. Attorney L. Stanton Towne of McDermott Will & Emery represented the firm. Robert Sorin of Fried, Frank, Harris, Shriver & Jacobson LLP represented Macklowe.
Both transactions bode well for the leasing market. The McDermott transaction marks the sixth major Manhattan law firm Studley has represented in the past year. Those transactions comprise more than 1.25 million sf of space in Midtown and Lower Manhattan. According to statistics from Jones Lang LaSalle, more than 2.4 million sf was removed from the market in the first two months of the year. However, there has not been any significant increase in Midtown class A rents this year, but Downtown rents did not change. (JLL notes that the listing of 7 World Trade Center, which will be available in January 2006, pushed the average class A rent to $38 per sf from $33 per sf.)
And according to GVA Williams, the amount of space absorbed so far this year was the biggest net gain of space removed from the market vs. space added since the second quarter of 2000. The firm says more than 800,000 sf of sublease space alone was absorbed in Midtown South, reducing sublease space as a percentage of total availability to 17%, down from 25% in the fourth quarter of 2004.
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