Banking giant Natixis close to signing 270,000 s/f deal.

For months the French investment banking giant Natixis has been patiently prowling Manhattan for office space under the guidance of Cushman & Wakefield's power leasing broker John Cefaly.

Now, with major financial companies dumping big blocks of square footage at discount rates in some of midtown's prime office towers, the firm has finally found its opportunity to swoop in and capitalize on the shudders going through the market.

Natixis is said to be close to signing a roughly 270,000 s/f deal at 277 Park Avenue, space that it will sublease from JPMorgan Chase, who has been shedding offices as it relocates staff to 383 Madison Avenue, the building it received as part of its fire sale acquisition of Bear Stearns in March.

The firm will pay rents in the $80s per square foot. Brokers say that Natixis likely would have had to pay rates over $100 per square foot had it signed a lease for space of the same size and quality before the current economic tumult began to tug on the Manhattan leasing market late last year.

The problems in the financial sector have prompted many firms to unload blocks of sublease space, offices that typically come at a discount to space offered directly by landlords because the sublessors are usually eager to get rid of them and cut their losses.

Part of a shortlist of large tenants trolling the city for sizeable offices at a time when most have put their real estate needs on hold or are disposing of square feet to cope with the sagging economy, Natixis plans to use the new space to consolidate offices it has spread throughout midtown.

The bank was created in 2006 via a merger between the French financial institutions Natexis Banque Populaire and Ixis and has groups, according to its website, in 1251 Avenue of the Americas, 1345 Avenue of the Americas and the plaza district trophy 9 West 57th Street among other locations.

During its search, the firm had been linked to a number of properties, including the new office tower rising across from the Port Authority bus terminal near 42nd Street, 11 Times Square. But SJP Properties, the builder of that one million square foot commercial development, which is slated to be ready for occupancy next year, has held firm on rents, brokers say, even though demand for space, especially large, pricey offices, has slackened.

Led by a Cushman & Wakefield team headed by Cefaly and another leasing executive, Augustus Field--who together handled the rating agency Moody's 600,000 s/f deal at 7 World Trade Center in 2006--Natixis instead was selective about what deal it wanted to do.

Brokers say that most tenants who need space but don't have to sign a lease within the next few months are refraining from making real estate commitments in order to see whether pricey Manhattan rents will begin to droop as the leasing market cools. Natixis played this card, but couldn't be too coy because its sizeable space needs required it to arrange a deal well in advance of when its present leasing commitments expire so that it can organize how it will arrange its offices in the new space and ready the space for its occupancy.

But by also biding its time, the firm was able to take its pick among a number of locations that are coming available in well located midtown towers as tenants from the financial sector continue to struggle in the aftermath of huge subprime losses and prune their office footprints.

Aside from the space at 277 Park Avenue, JPMorgan Chase is shedding offices at 237 Park Avenue and 320 Park Avenue, space that it inherited from Bear Stearns. The firm is even offering floors at its world headquarters 270 Park Avenue, as it plans to fill large portions of the one million square foot 383 Madison Avenue.

It inherited the space at 277 Park Avenue when Chase Bank acquired Chemical Bank in 1996. 277 Park Avenue had been Chemical's headquarters. Chase acquired JP Morgan to become JPMorgan Chase in 2000.

Besides JPMorgan Chase, a number of other financial firms are contemplating or in the midst of offering space for sublease, including Lehman Brothers, Citibank and UBS.

No one involved in the deal was available for comment. A Colliers ABR leasing team is listed as the agent for 277 Park Avenue on the commercial property database website Mr.OfficeSpace.com, but couldn't be reached.