Cohen has what everyone wants.

With vacancy rates dropping in midtown and rents expected to continue upward, the prospect of having a big block of vacancy for many landlords isn't the kind of cause for concern it may have been in years when the market wasn't as brisk.

Rather, empty space created by a soon to be exiting tenant has become an attractive opportunity to reap the spoils of a real estate market in which large blocks have become scarce and a record volume of deals are being done at rents formerly reserved to only the city's most elite office properties.

Charles Cohen, president of Cohen Brothers Realty and owner of several office buildings in Manhattan, finds himself with just such an opportunity at 805 Third Avenue, a 525,000 s/f glass tower his firm developed in the early 1980s.

In 2007, floors 18 through 27 are slated to become available in the 31-story building when advertising firm Kenyon & Eckhardt vacates 238,000 s/f, space it has leased for the last 25 years. One of the building's earliest tenants, and the first to make such a sizeable commitment, the firm wound up never actually occupying the space, opting at the time to remain at its headquarters in the Grand Central district. The firm instead subleased the entire space at 805 Third Avenue to a collection of tenants.

Cohen said that he has refrained from renewing with those tenants, even though it could be just as lucrative as bringing in a fresh bunch, because many of them occupy partial floors. Cohen said that his aim is to reposition the building as a place for larger, corporate tenants, who often favor full floors not only to simply satisfy their space needs, but also because it offers them the cache of having a more prominent presence in the building.

Because 805 Third Avenue's floors are 23,800 s/f, taking one is more accessible to tenants who would be wary to make the kind of larger space commitment a full floor often requires. It also means that a tenant isn't likely to sign a deal as large as Kenyon & Eckhardt's. Many big space users prefer vast floors because they present operational advantages by allowing a company's offices to be contiguous rather than segmented from one another on different floors.

But then with the steady pace of mammoth leases signed in midtown and murmurs in the market that the United Nations is quickening its search for a big block of east side office space to house its operations while the UN campus is renovated, a large tenant just may land at 805 Third Avenue after all. The UN is in close proximity to 805 Third.

Just what types of deal sizes the building attracts is likely to depend on how market conditions continue to unfold, including how many similar large blocks become available. If there are spaces of similar size but situated on fewer floors, a layout preferable to large tenants, Cohen may have to lease the floors in multiple deals. One thing however does seem certain; rents will almost undoubtedly be up even further by the time the space enters the market.

"Rents have been held down for an inordinately long time," Cohen said. "It was only a matter of time before they would leap up like they've been doing and, once they make that leap, I believe that they should at least stabilize." Cohen mentioned a group of recent deals in speaking about the types of tenants he is eager to continue to attract to the property. Toyota's commodities trading arm, Toyota Tsusho America, recently signed a lease for the 17th floor and most of the 16th floor in a 43,000 s/f deal. Extell Development Corp., repped by Jim Gross of the real estate services firm, Williamson, Picket, Gross, leased the building's 7th floor. Horizon Media, represented by a Newmark Knight Frank brokerage team, took the 6th floor.

To boost the building's profile and further cultivate it as a home for corporate tenants, Cohen has invested $15 million in a capital program that will renovate and replace the building's elevator cabs, public corridors, and bathrooms.

The lobby, a multistory space with a significant retail portion that earned the building's nickname, The Crystal Pavilion, will also be redone for the third time since the property was built. Included in that revamping will be a new waterfall designed by Fluidity Design

Consultants, which just finished construction of the stunning 27-foot tall, 75-foot wide, rainwater fed waterfall in the lobby of the Hearst Tower. "It's all about positioning the building for tomorrow's tenants in accommodating a contemporary design that is fresh and original and timeless and incorporate all the building materials that will distinguish the building as a unique environment," Cohen said.

An additional 70,500 s/f will be opening up in 2008 on floors 28-30, space that could serve as expansion space for an existing tenants or cater to a new user.

That space was occupied by the law firm Darby and Darby, which will be relocating its offices to 7 World Trade Center, where it signed a lease for the 41st and 42nd floors in an 80,000 s/f deal.