SL Green structures 60,000 s/f lease for bank HQ.

In a major midtown real estate transaction, SL Green Realty Corp. announced that it has negotiated a lease with Commerce Bank for three full floors comprising 60,000 s/f of retail and office space at 317 Madison Avenue, a 490,000 s/f building situated at the northeast corner of 42nd Street.

SL Green will work with Commerce Bank to redevelop the building, transforming the ground-level into a retail bank branch, and the second and third floors into the bank's New York City headquarters.

This leasing transaction will enable the bank, which currently has corporate offices spread across several locations in the city, to consolidate its New York City regional headquarters in one Midtown location with prominent identification.

Commerce Bank will take possession of the space before the end of the year, and redevelopment will begin immediately thereafter. SL Green expects the bank to occupy the space by mid-2005. The redevelopment will conclude a significant capital program undertaken by SL Green in 2003. Upgrades to the property will include a complete reskinning of the first three stories of the building's facade, the replacement of all storefronts and the installation of dramatic, oversized windows giving the exterior of the building a state-of-the-art, contemporary look. These renovations will be consistent with the master plan of the building which has already included renovations of the lobby, corridors and elevator cabs by SL Green.

In order to create a contiguous area of space to accommodate Commerce Bank, SL Green had to assemble 11 separate units of space including the simultaneous buyout or relocation of seven existing tenants with long term leases.

"SL Green is committed to creating value for its tenants and shareholders by upgrading, repositioning and releasing the properties in our portfolio," said Marc Holliday, president and chief executive officer of SL Green. "When we acquired 317 Madison two years ago, we envisioned creating a "big block" retail space as part of our strategic plan to reposition the property. This lease with Commerce Bank will allow us to execute on that plan, unlocking the full value of the property two years ahead of schedule while accommodating new and existing tenants within our portfolio." "We're delighted to have a prominent company such as Commerce Bank as the anchor tenant for 317 Madison," said Steven Durels, Senior Vice President and Director of Leasing at SL Green. "Once completed, the renovations will redefine the property and completely transform its look and feel."

"This transaction underscores our strong long-term commitment to New York City and focus on continued growth in a market that will be a very important part of Commerce Bank's continuing success," stated Commerce Bank Founder and Chairman Vernon W. Hill, who said his growing bank "ultimately plans to have over 400 retail stores" in the metropolitan New York marketplace.

Using a retail business model that seeks out high profile, high traffic sites, Commerce has enjoyed extraordinary growth in the New York City marketplace--going from zero retail locations in late 2001 to 36.

Jeff Roseman of Newmark New Spectrum and Nick Jekoskin of Interstate Commercial represented the tenant in the transaction.