A new Midtown lease appears to be a double win for the real estate industry.
Newmark & Co. Real Estate has inked a 15-year deal for about 184,200 square feet at 125 Park Ave., a SL Green Realty Corp.-owned tower across the street from Grand Central Terminal.
At a time of inconsistent deal activity and high vacancy rates at some office towers, the transaction seems to spell good news for SL Green, which reported Monday that 125 Park Ave., a block-long, 654,000-square-foot site, is now more than 99% leased. Buildings near transit hubs such as Grand Central have been bright spots in the leasing market of the past few years.
The deal, in which Newmark renewed its lease at its longtime home while also boosting its presence by about 31,400 square feet, may also be a positive tiding on the tenant side. Indeed, a large chunk of Newmark’s business is brokering office deals, a sector that would presumably be weakened by the so-so office market. Although it’s not known why exactly Newmark needs the extra space, the fact that the company is actually expanding and not contracting is a healthy sign for the sector.
Newmark was represented by an in-house team of Jason Perla, Brian Waterman, David Waterman and Matthew Schreiner.
An SL spokeswoman declined to share what Newmark will be paying per square foot in rent, saying only that the space was being marketed for $70 per square foot annually.
But the data service CoStar says that the 30-story, prewar, mixed-use building between East 41st and East 42nd streets, which is considered a second-tier Class B site, in the lingo of the industry, charges tenants rents of about $60 a square foot annually.
Historically known as the Pershing Square Building, for American Army general and World War I hero John J. Pershing, No. 125 was developed in 1923 by Henry Mandel, a Russian immigrant who also built residential complexes such as Chelsea’s London Terrace and West 57th Street’s Parc Vendome.
The 96-year-old Newmark, which established its headquarters in the building in the mid-1990s, originally took a 47,000-square-foot berth, according to news reports from the time. As part of the deal, company executives pushed for a rebranding of the 1923 structure by changing its address from 100 E. 42nd St. to the more prestigious-sounding and presumably more lucrative 125 Park Ave., reports said.
In the following decade, SL Green bought the landmarked site from San Francisco-based developer Shorenstein Properties, paying $330 million for the property in 2010.
Other tenants leasing office space there today include executive recruiter Robert Half, furniture manufacturer Haworth and law firm Meister Seelig & Fein.
For its part, SL Green, Manhattan’s largest office landlord, owns either a stake or the entire building at 54 locations, for a total of nearly 31 million square feet.
