Penn District wallflower proves to be popular.
The firm added the 15th floor to the two it already occupies, 13 and 14, in an expansion that will grow its presence in the 425,000 s/f building to 66,000 s/f. Rents for the space start at $35 per s/f but escalate to $40 per s/f over the term of the deal.
Cushman & Wakefield brokers John Picco, Mitch Arkin, and Scott Vinnet represented the building's landlord, C&K Properties, in the deal. Northern Leasing was repped by former CB Richard Ellis broker David Itzkowitz, who now operates his own commercial leasing business.
Squat with a brick facade, 132 West 31st Street is an archetype of the kind of older office buildings that populate the area surrounding Penn Station and that had been overlooked by tenants in recent years in favor of more polished office corridors in midtown and midtown south. C&K Properties had even considered selling the building in 2005 before reconsidering just a few weeks after putting the building on the market.
The city's tightening office market along with a greater level of recognition for the value of the area's transportation infrastructure has since buoyed the Penn District's popularity among tenants.
Research and engineering company Scientific Application International Corporation subleased 50,000 s/f of space in 132 West 31st Street from HIP in March 2006. The deal, which was for the entire 6th floor and 8th floor in the building, absorbed the final portion of the roughly 130,000 s/f HIP had available for sublease since it vacated the building and relocated its offices to 55 Water Street two years ago.
Marketing and technology firm 24/ 7 Real Media was the first to take up some of the HIP sublease space, completing a 32,000 s/f deal for the entire ninth floor and part of the 16th at the end of 2004. Little more than a few months later, the Jewish Association for Services for the Aged, or JASA, an existing tenant whose lease for direct space on the 15th floor was set to expire, took advantage of the cheaper sublease space and moved its offices onto the tenth floor. Another existing tenant, printing firm Merisel, then expanded, subleasing the entire fifth floor. That 25,300 s/f deal brought the firm's total presence in the building to roughly 100,000 s/f.
Now rents in the building have risen to the point where Merisel is considering a relocation to one of the cheaper office markets outside of Manhattan because its printing operations don't require such a centrally situated and pricey location.
Although the firm may offer its floors for sublease, a source said that the landlord would terminate the remainder of their term in order to do a direct deal with a new tenant. The toy industry had looked at the space before its search for a new industry building collapsed in recent months amid internal discord and the city's rising rental market. According to the source, an industry group of fashion tenants is now considering the block.
It remains unclear where Marisel will relocate, but space in Jersey City, just like Manhattan, is fast disappearing. Harborside Financial Center, a 3.6 million s/f cluster of office buildings on the Jersey City shore, is virtually fully leased. Real Estate Weekly reported in November 2006 that E*TRADE had signed a 110,000 s/f expansion and renewal at Harborside Financial Center's Plaza 2. John Picco, one of the agents for 132 West 31st Street, is handling a 25,000 s/f space being offered for sublease by JP Morgan Chase in the property, one of the last available pockets in the Harborside complex.
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|Comment:||Penn District wallflower proves to be popular.|
|Publication:||Real Estate Weekly|
|Date:||Feb 7, 2007|
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