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Business is heating up as summer draws to a close.

New York's office market is enjoying an end-of-summer leasing run.

As Real Estate Weekly reports this week, C.V. Starr is considering a 120,000 s/f deal at 399 Park Avenue, just a few weeks after the investment firm Moelis & Co. committed to 96,000 s/f in the building.

In other deals first reported by Real Estate Weekly, the law firm Orrick, Herington & Sutcliffe LLP, a law firm that had long been poking around the market for office space, signed for around 200,000 s/f at 51 West 52nd Street, the tower on the corner of Sixth Avenue that is known for its most prominent tenant CBS.

Holland & Knight, a law firm whose current lease at 195 Broadway in Lower Manhattan is set to expire, also arranged a move to three floors at 31 West 52nd Street.

Yesterday, the Post's Steve Cuozzo reported that the Gap just finished a 265,000 s/f deal at 40 Worth Street and also in recent weeks that the financial firm, Depository Trust & Clearing Corp., is weighing whether to move its gargantuan 750,000 s/f offices, which are currently located at 55 Water Street, to New Jersey. At this rate, it's hard to believe that Manhattan could lose out.

Even some of the market's black eyes haven't been as bad as they originally seemed. Centerline Capital, terminated its high priced leased at 1095 Avenue of the Americas, but as Real Estate Weekly first reported earlier this summer, the stock trading firm, Instinet stepped in to fill the space, albeit at less rents.

As first reported in Real Estate Weekly, Highbridge Capital also shed some space that it leased last year at 40 West 57th Street, but it was soon snapped up by another financial tenant, Alix Partners, which is moving from the nearby trophy 9 West 57th Street. And all the while, firms have been renewing their Current offices, eager to milk the market's dipping rents. That area of the market has been producing a steady flow of deals including two recent transactions in August with the Netherlands Mission and Madison Realty Capital Advisors LLC.

Netherlands renewed its current space, which like many missions is just blocks from the United Nations campus, at 235 East 45th Street. The mission occupies the building's top three floors, 15, 16 and 17, a 25,000 s/f space that it extended for another five years. CB Richard Ellis's Matthew McBride represented the tenant.

Madison Realty Capital converted its expiring 9,400 s/f sublease at 825 Third Avenue into a direct deal with the building's landlord, the Durst Organization. The space, on part of the building's 37th floor, was asking for just under $50 per square foot, what seems like a bargain compared to what space high in the sky and offering soaring views traded for a year ago. Madison's effective rents likely equated to far lower, as is typical in deals these days because tenants hold most of the leverage in negotiations and are able to chip away at rents and receive incentives such as free rent and work allowances.

Greg Kraut, another CBRE broker, represented the tenant. CBRE also handles the building's agency work.
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Comment:Business is heating up as summer draws to a close.
Author:Geiger, Daniel
Publication:Real Estate Weekly
Date:Sep 2, 2009
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