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Deals right and left near Grand Central

Firms grab $40 leases while grabbing's good; Apollo Management takes Tyco space

Crain's New York Business

By Christine Haughney

November 24, 2003

Fearful that the market may turn around rapidly, more companies are making a big push to find deals near Grand Central Terminal.

"There are a lot of areas you can get in now for under $40 a square foot," says Kenneth Rapp, a CB Richard Ellis executive vice president who works extensively in the neighborhood.

Law firm Meister Seelig & Fein plans to relocate to 140 E. 45th St. from 708 Third Ave. Under a 10-year lease, the firm will consolidate its offices into 30,000 square feet on two floors, from three floors in its current building. Studley is representing the firm in the deal, and Cushman & Wakefield Inc. is representing landlord Macklowe Properties. The asking rent at the building is $40 a square foot.

"It's well-located," says Stephen Meister, a partner. "It's a modern building. It will give us the space we need at a reasonable price."

Metropolitan Research Associates Inc., which manages and monitors clinical trials, recently subleased 16,915 square feet--nearly the entire 19th floor--at 666 Third Ave. The firm used to rent three separate offices on two floors at 60 E. 42nd St. CB Richard Ellis represented law firm Oppenheimer Wolff & Donnelly, which sublet the space. Tenantwise represented Metropolitan.

Metropolitan doubled its space with the six-year sublease in 666 Third, where the asking rent is $46 a square foot. The 43-person firm will add 30 more employees by year's end.

"We feel like we're just one big company, and it's a lot more fun," says managing partner Stacy Mamakos Martin. "The staff can actually sense the growth of the firm now that we're in the same space."


Apollo Management, an investment and real estate firm led by investor Leon Black, plans to take space in Tyco's former 31,000-square-foot offices at tony 9 W. 57th St.

Apollo's private equity and real estate departments are located in a 29,400-square-foot office at 1301 Sixth Ave. The real estate arm, which helped develop the Time Warner Center, will move into the Columbus Circle building, says Andy Cohen, a partner at Apollo Real Estate.

Apollo Management's remaining divisions are slated to move into 9 W. 57th, where the asking rent is about $100 a square foot. Apollo's new neighbors would include Chanel, Brasserie 81/2 and Banc of America Securities. Cushman & Wakefield is representing Apollo in the deal, and The Staubach Co. is representing Tyco.

"We are still in negotiations, and it's all subject to landlord consent," points out Brian Higgins, a Staubach principal who is brokering the deal for Tyco.


Thomas Publishing Co. signed a 10-year, 115,000-square-foot lease at longtime home 5 Penn Plaza, or 461 Eighth Ave. The firm, which has the world's largest online database of product formation, has been at the building since it opened in 1916. Asking rents in the building are $35 to $45 a square foot.

Other building deals inked in the past two months include a 13,562-square-foot lease renewal for the Steamfitters' Industry Funds. Engineering firm Edwards & Kelsey took a 23,000-square-foot space.

These transactions put 5 Penn Plaza in a better position as tenant CNN prepares to leave its 80,000-square-foot space for the Time Warner Center, and the state Department of Health's lease for 150,000 square feet comes up for renewal.

"It's nice to know that the existing tenants in the building are staying and that new tenants are moving in," says Peter Turchin, a CB Richard Ellis senior vice president who represents the landlord, 461 Eighth Avenue Associates. "We are feeling very confident about renting our next two blocks of space."


Defying fears that one of the buildings closest to Ground Zero would never fill its 26 stories after the World Trade Center attack, 2 Rector St. has found a tenant for its final open floor.

Popkin Software signed a lease to move into 17,384 square feet on the 18th floor. The application designer now rents 10,800 square feet at 11 Park Place. CB Richard Ellis represented Popkin in the deal, and Brack Capital Real Estate represented landlord Larry Gluck's firm, Stellar Management.

"We're pretty much leased up," observes Kevin Richards, director of leasing for Brack Capital Real Estate.

With incentives, six to eight months of rent-free occupancy, and discounts to build out the space, Popkin is paying an average of $30 a square foot over the 10-year lease.

Copyright 2003 Crain Communications, Inc

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