New Tenants Flock to Newly Renovated Times Square-Area Office Building

NEW YORK CITY-More than two years after renovations began at 501 Seventh Ave., the $53-million capital improvement program has come to an end. The improvements, along with a management change and compelling economics, brought 35 new tenants to the Times Square South office building.The 500,000-sf building at West 37th Street and Seventh Avenue is part of the W&H Properties portfolio. It is owned by 501 Seventh Avenue Associates, LLC, a partnership led by Peter L. Malkin and Leona Helmsley.The capital improvement began when W&H hired CB Richard Ellis to manage and lease the property in 2003. Since that time there have been approximately 50 new leases signed, with approximately 35 new tenants taking space, CBRE associate Garett Varricchio tells GlobeSt.com. Varricchio is the exclusive leasing and managing agent.”I definitely think that many of the new tenants would not have considered 501 Seventh prior to the extensive capital improvements,” he says. He adds that about 70% of the leases were new tenants; however, they accounted for approximately 85% of the square footage leased.The buildings major tenants include Warnaco, with 186,000 sf of space; LISC, with 49,000 sf; and New York Power Authority, with 48,000 sf. There is currently 10,000 sf available and asking rents are $37.50 per sf for the front of the building and $32.50 per sf for the back, Varricchio says.The improvements included the installation of a state-of-the-art air conditioning systems, new electrical and security systems, new elevators, bathrooms and windows, and a fully renovated lobby, according to Varricchio.”When W&H hired us as managing agent two years ago and added 501 Seventh Ave. to the portfolio, the building was nondescript, with minimal amenities,” explains Scott Pudalov, executive vice president of CBRE.

Now, he says, the building occupancy stands at 99%, approximately triple the rate it was in 2003. “Along with new tenant and broker initiatives, managerial responsiveness and ownership involvement, the renovations were a major component of the property’s metamorphosis,” Pudalov adds.