Can buildings successfully change identity?
But while not all are equally pleased, most brokers point to transitions like AT&T's Philip C. Johnson-designed "Chippendale" headquarters to Sony's new home, as well as the host of Avenue of the Americas corporate headquarter transitions, as examples of thriving metamorphoses.
Carol Nelson, executive vice president of Edward S. Gordon, who was part of the team that worked on the Sony deal, recalled an earlier transaction when the Colt Industries Building was sold to the Bank of Montreal. "They occupied the building, changed the name and had a successful leasing program," she said.
But Ronald B. Bruder, president of the Brookhill Group Inc., who manages and owns properties including shopping centers around the country, believes the Sony operation of the former AT&T building has changed its image for the worse.
"The AT&T building lost some appeal when it went to Sony," he said. "It went from a mega corporation to a Japanese retailer." Additionally, Bruder, whose offices are nearby, said the change of the public plaza to a showcase for Sony products has been a "disservice" to the community.
Nelson says the ability to lease up unneeded space depends in general on what the corporate owner does with the property and the amenities it offers to new tenants.
She points to One New York Plaza and One Chase Manhattan Plaza as buildings that had a real corporate identity and are now multi-tenanted.
"They totally upgraded the buildings, and have attracted major corporate tenants," she said. Prudential and Goldman Sachs now reside in One New York Plaza, while One Chase Manhattan Plaza is home to tenants such as the law firm of Milbank Tweed Hadley & McCloy and Zurich Reinsurance.
"I think a building gets some of the panache of the tenant," Bruder agreed. But he added, "When a building gets a strong image, it takes years to overcome it."
Peter R. Friedman, chairman of Peter R. Friedman, Ltd., which represents many corporations and owners, believes that those who have entered the real estate business in the last five years will make the adaption to new corporate names faster than those that have been in the industry for many years.
As for the change from Pan Am to Met Life, he said, "Anybody that was in the real estate business will catch themselves over lunch or dinner referring to it as Pan Am."
Michael Zaleski of CB Commercial recalled the Met Life people began referring to the building as Pet Life when the Pan Am "P" remained up for a long time due to a peregrine falcon nest.
In the same vein, Peter L. DiCapua, senior vice president of Atco Properties & Management, refers to the identity problem at 30 Rockefeller Plaza. "People really joke about the RCA Building now that it's the GE Building," he said. "For years now, I look at the GE logo and it doesn't look right without three letters. It has a real effect."
Peter Hauspurg, president of Eastern Consolidated Properties, whose company focuses on the sales side, believes the Met Life change was good for the property. "It helps the property, because they have deep pocketed professionals running it, and it gets you in the building."
Owner manager Anthony E. Malkin, president of W&M Properties, observed it doesn't just take a corporation to change the image of a building. "Landlords can change images," he said. "We're doing it with 1185 [Avenue of the Americas] even without a major tenant or rollover."
Newmark & Company Real Estate's CEO Barry Gosin agreed. "It takes work but it can be done," he said. "You establish it through renovation, new tenants or a new agent." But he said, sometimes people will do a modified renovation and that doesn't always prove successful.
Friedman warned that just touting a building as the "new" something or creating marketing materials is not enough to change the identity, and the owner must follow through with what is promised so the tenants can see what has transpired. "The New York tenants is the consummate devil's advocate," he observed. "They are true tire kickers. They don't pay nearly as much for an opportunity that's in a picture than they do for something they can physically see."
Malkin noted if a building is vacant and a tenant comes in and brings a name toi a building, they might be bringing a premium of value. But if a building is already successful, an incoming tenant would have a hard time trying to use the building's name as a deal point.
"Building owners don't just name the building," said Malkin. "Those tenants make it a part of their lease."
While some tenants have their names on a building, the property may never be called that by anyone outside the company - a point maybe worked out in the lease. Malkin's 1185, for instance, has the name West Point Stevens over the door, but he says "We don't refer to it by that name, but they are entitled to have it up."
Jonathan A. Cope, an associate broker with Galbreath Riverbank who specializes in the Downtown market, believes that certain streets have a cachet of their own, above and beyond a corporate identity.
"If you are talking Wall Street, you are not giving up the Wall Street address for the tenant," he noted. So when Two Wall Street gave signage to the law firm of Carter Ledyard Milburn to help entice them to stay in the building, the lettering was not made as large as the Two Wall Street signage, he added.
Or a major tenant could be afforded a smaller name plat despite another corporate name on the building, such as what Coopers & Lybrand achieved at 1301 Sixth Avenue, where Credit Lyonnais has the larger letters. In spite of the dueling corporate identities, the property is still referred to the J.C. Penny Building by some, after its long departed tenant.
For the most part, Cope believes a high caliber tenant actually draws others to a building. "If you have a quality anchored retail tenant it shows 'if it's good enough for them it's good enough for us,'" he said.
A prestigious avenue address on Broadway, Madison or Fifth may be left as the property's handle, but in keeping with the egos and full tenancy of the residents, many Park Avenue corporate headquarters have taken on an eponymous identity. Those with multiple tenancies, however, end up with number names.
DiCapua said Atco's 555 Fifth Avenue property, now undergoing an extensive modernization program, was known as the American OIl Building before the company moved to Chicago in late 1969. "We took the name off the building and it became known as 555 Fifth Avenue and not American Oil," recalled DiCapua. "We have tenants that are still with us and they weren't affected, the building wasn't affected."
The most important thing for a prospective tenant when a building is sold, Friedman said, is knowing the track record on the incoming entity. Will the new owner actually make promoted changes and is there a commitment to quality?, he asks.
He points to the city's long-time real estate families who have strong heads or co-heads watching every facet of their operations as the most successful operators. Although a consortium of "well heeled" investors can buy a property together, Friedman warned, it doesn't mean the new partners will get along or agree on needed changes.
"If the Rudins or Fishers say they will do something they do it," he explained, "but if the XYZ real estate partnership says they are going to do something, it may not be enough to win over the tenants. No one knows if they will follow through."
Friedman notes that many re-purchases of properties are being made by the nouveau riche corporations and are merely reflecting the world's political and economic climate. He points to MasterCard's rental and re-naming of Burlington House at 1345 Avenue of the Americas and the JMB Properties' make-over of 1211 Avenue of the Americas from the Celanese Building to a home for foreign banks as examples of the world-wise surge in financial services over the older textile businesses.
Zaleski thinks the change at One Madison Avenue - the original Met Life Building - to the First Boston Corp. would have an effect on the entire Madison Square neighborhood.
"If First Boston goes to Met Life," he said, "all those Hermes tie types will be down there. Met Life's employees are just insurance type, not high profile traders and there is a big difference in culture."
The culture at 277 Park might not change with the addition of new, high profile banking, attorney or trading clients, but th outside of the property may change markedly by either the removal of its glass erector set atrium or lighting and cosmetic modifications.
While the building and its infamous Chemical Bank atrium is being actively leased, Friedman noted: "Time heals all wounds. If the atrium is kept for a couple of years, tenants will still refer to it as the Chemical Bank Courtyard, but as anyone with a large enough presence takes over, ultimately, with minor cosmetic changes and signage they can overcome the identity crises. It doesn't mean it won't linger in the minds of New Yorkers that Chem once lived there."
Hauspurg agreed that a building can overcome a former image. "What's in there before may have an effect but it can be obviated by what's in there today," he said. "You can be stuck with taint from the prior tenant but its changeable by a plan to change the building itself by upgrading and repositioning the property. The public has a short memory."
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|Title Annotation:||name changes of famous New York, New York buildings|
|Publication:||Real Estate Weekly|
|Date:||May 11, 1994|
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