NEW YORK CITY-In a move that would mark another coup both for TIAA-CREF and Third Avenue, legal technology firm Epiq Systems is allegedly close to signing a lease for about 100,000 square feet at 685 Third Ave., according to the Commercial Observer and Crain's New York Business. CBRE is representing the financial firm in the transaction, with Paul Amrich said to be the lead on the deal. TIAA-CREF declined to comment.
The agreement would mark the third such transaction since TIAA landed the property in 2010 and it fits into a trend along Third Avenue, on Midtown East, of lower rents and ample supply leading companies to snap up space, says Crain's.
Epiq would move from its offices at 90 Park Ave., in Midtown East, over to three floors in the new location—also in Midtown East—where rents are rumored to be hovering around $50 per square foot. That compares with much higher average rates of up to $72 per square foot in the neighborhood, according to data from Cushman & Wakefield.
Such discounting is not uncommon for Third Avenue, says Alan Desino, executive managing director at real estate firm Colliers International, in Crain's. "Third Avenue is the softest market in Midtown," he reports. "There's no question that is where the best bargains are."
In the first quarter of this year, the avenue's availability rate leaped to 17.8%, from 15.2% in the prior quarter, according to Colliers. That compares with a rate of 11.7% in Midtown North during the same period. The meteoric rise is due in part to much space becoming vacant, Crain's says. In addition to 685 Third, Pfizer recently added 274,200 square feet to the market. In all, there are a half-dozen buildings along the avenue that have, or will have within 12 months, at least 100,000 square feet of contiguous available space, Desino notes in Crain's.
Sources also told Crain's that the owners of buildings along Third Avenue, including those at 747, 767 and 850, have sunk money into creating attractive prebuilt office space to lure smaller tenants, the business paper reports. Others are offering months of free rent, and in some cases even striking deals at well below their asking prices.
TIAA bought 685 from Pfizer for $190 million, according to city records, and has conducted a substantial renovation that included a refurbished lobby, elevators and pocket park adjacent to the building. Architecture firm Gensler executed the upgrade.
In August of this year, salesforce.com signed a 10-year lease for 74,349 square feet at 685 Third. It previously occupied just 16,350 square feet at 2 Grand Central Tower, according to the Observer. Back in 2011, accounting and consulting firm Marks Paneth & Shron began renting 85,460 square feet at 685 Third, becoming TIAA's first long-term tenant at the building.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
