Future looks bright as non-profit inks deal with Vornado.

The Association for Computing Machinery has just inked a 15-year office leasing deal for space consisting of between 30,000-33,000 square feet at Vornado-owned One or Two Penn Plaza.

The ACM will take occupancy at the end of 2006, when its lease at 1515 Broadway, owned by SL Green, expires.

Vornado has the option of deciding which of several predetermined spaces the ACM will occupy in one of its Penn Plaza buildings, at predetermined rates.

CB Richard Ellis' Jason Pollen and Richard Karson represented ACM in the atypical transaction. The objective was to lock in a rental rate for its client in order to benefit its members. The Association, a non-profit, provides research materials and training to technology companies and operates on a relatively fixed budget. Dan North of Vornado acted for his company in the transaction.

"ACM was not going to be able to remain at 1515 Broadway," said Mr. Pollen "because an existing and much larger tenant is set to expand within the building. So we implemented a strategy of forward leasing space now to mitigate the risk of higher rents in two year, while avoiding having to pay any double rent."

"Vornado's portfolio provided the right set of circumstances--the availability of several similar sized and comparable spaces in 2006," said Mr. Karson who added that the deal is structured to provide flexibility to both the landlord and tenant with regards to how the space is demised at the time it is designated.

One Penn Plaza, built in 1972, is a 55-story 2.4 million-square foot property with tenants including Salomon Smith Barney, Cisco Systems, Federal Express, Metropolitan Life Insurance Company and Parsons Brinkerhoff.

Two Penn Plaza, built in 1968, is a 31-story 1.56 million-square foot building and home to Madison Square Garden, McGraw Hill Companies, and Information Builders.