Durst renegotiates complex 'restacking'.

Through a carefully-orchestrated real estate restacking, The Durst Organization has renegotiated office space for five of its current tenants at 733 Third Avenue, enabling publisher Rodale Inc. to expand its occupancy to 113,699 square feet to become the building's largest tenant.

As a result of a complex plan, Rodale--a tenant since 1994--will lease the entire sixth through ninth floors, as well as a portion of the 10th floor. The company will also retain an option to lease the 46,000 square feet it currently occupies on the 12th, 15th and 16th floors.

"In 2003, Rodale recorded its single best year in the company's history, with profits rising 135 percent over 2002," says Steve Kalin, Rodale's executive vice president and chief operating officer. "Given this growth across our magazine, book and ancillary businesses, we needed to upgrade our office situation to meet current and future business needs.

"With Durst's and CBRE's help, we were able to architect a deal that gives us both a contiguous floor layout and substantial flexibility in the future."

Rodale has been the leading publisher of information on living a healthy, whole life for more than 60 years. Today, Rodale reaches more than 31 million people in 42 countries monthly through its magazines, books, Web sites, integrated marketing solutions and international publishing agreements.

"The restacking is a creative solution that enables Rodale to secure the contiguous space it requires and satisfies those tenants affected by a reconfiguration of the stacking plan," says Tom Bow, senior vice president of leasing at The Durst Organization.

"Restacking a building takes a great deal of rime, coordination, and patience. We kept going back to the drawing board to find the right solution."

"This transaction makes economic sense and allows Rodale to remain and expand its New York offices in one of Midtown's most prominent business addresses," adds Richard Karson, executive vice president of CB Richard Ellis, which represented Rodale in the transaction.

To achieve contiguous office floors for Rodale, The Durst Organization devised a restacking plan that involved Rodale and four additional tenants: the National Multiple Sclerosis Society (NMSS), AIG-SunAmerica, Choice Logistics, Inc., and Financial Federal Corporation (FFC).

NMSS, which will combine its headquarters operation at 733 Third Avenue with its New York City chapter, will relocate to the third floor and a portion of the second floor, for a 17-year term. The organization will be leasing approximately 39,000 square feet.

AIG-SunAmerica, a major tenant with approximately 60,000 square feet, will surrender its third-floor lease. Previously, AIG-SunAmerica had sublet the third floor to Rodale under a short-term sublease.

Once Rodale has relocated, this space will be used by NMSS.

In an effort to downsize, Choice Logistics, a customized transportation provider, will relinquish its space on the seventh floor and consolidate its operations on the fifth floor.

Financial Federal Corporation, a sub-tenant of NMSS on the seventh floor, also played an important role in the restacking.

The Durst Organization assumed NMSS's position as sub-landlord and will relocate FFC to the 24th floor, where it will occupy approximately 7,250 square feet for five years.

"Without the surrender of AIG-SunAmerica's, Choice Logistics', and FFC's space on the third and seventh floors, we would not have been able to deliver the necessary contiguous and aggregate square footage in the building to Rodale and NMSS.

"The tenants' willingness to cooperate and respect timing issues helped us to achieve our goals, as well as those of the tenants," says Mr. Bow.

The Durst Organization plans an extensive renovation of the entrance and lobby, as well as improvements to the building's HVAC infrastructure. "These improvements enhance 733's presence and visibility on the avenue and provide an improved work environment within the building for our tenants," says Mr. Bow.

Currently 733 Third Avenue is called the AIG-SunAmerica Building. However, once AIG-SunAmerica's lease expires, naming rights officially will be given to Rodale. Until that rime, Rodale will be given secondary signage on the building.

"As a result of the five transactions, we have been able to lease approximately 160,000 square feet, or 40 percent of the building, to existing tenants," says Eric Engelhardt, assistant vice president of The Durst Organization.

"This restacking further illustrates our dedication to our tenants and our willingness to work with them to achieve their specific office needs."

Mr. Bow and Mr. Engelhardt represented the building owner. Mr. Karson, Jim Robbins, and Harly Stevens of CB Richard Ellis represented Rodale Inc. John Mambrino of Studley represented the National Multiple Sclerosis Society.