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Thursday January 05, 2012
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In Pre-Recession Twist, Solow Eyes $200-Per-Square-Foot Carve Out on High Floor of Trophy Nine West 57th Street
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 Manhattan hasn’t seen too many $200-per-square-foot commercial rental offerings since the recession brought rates crashing down.
But Sheldon Solow, the enigmatic and private owner of 9 West 57th Street, plans to lease some of his best office space in that prized trophy tower at those sky-high, pre-recession rents.
According to Scott Panzer, a leasing broker and executive at Jones Lang LaSalle who took over leasing for 9 West 57th Street in 2011, Mr. Solow drew up plans just before Christmas to carve the 30,000-square-foot, 49th floor of 9 West 57th Street into four pre-built office units. And he plans to charge about $200 per square foot, said Mr. Panzer.
The plan will allow the floor to be dealt out to smaller users, an approach that has several advantages. According to Mr. Panzer, while few office tenants have the financial standing to take an entire floor at those exorbitant rates, smaller, deep-pocketed office users such as hedge funds and private equity firms are less sensitive to real estate occupancy costs on a per square foot basis.
Mr. Panzer said the units, which will be sized from about 5,000 square feet to 12,000 square feet, will appeal to the same type of tenant who lives in 15 Central Park West, the residential equivalent of 9 West 57th Street.
“There are people out there who want to be able to look at where they live from where they work and vice versa,” said Mr. Panzer, noting that 9 West and 15 Central Park West are clearly visible to one another across the Central Park. “You could have a telescope and look out to see if your nanny is home.”
Floors at 9 West—a storied building in the commercial real estate industry and one of the most expensive office properties in the city—have been leased in this manner before. Mr. Panzer helped oversee a successful program to fill the building’s 31st floor by carving the floor into prebuilt spaces.
But in the past, Mr. Solow has shied away from employing the strategy for the 50-story tower’s marquee floors, space he has preferred to dangle at exorbitant rates only to users who would take them wholesale. In a building that is more than 50 percent vacant, Mr. Solow also appeared to care little that there few takers for his offerings.
The new approach would seem to better tap into potential demand. Mr. Panzer said that small office users approach him frequently asking about offerings in the building. Now he will no longer have to turn them away.
If the lease up of 49 is successful, Mr. Panzer said that the 50th floor—9 West’s penthouse space and one of the highest profile vacancies in the city—could be leased in the same manner.
Daniel Geiger, Staff Writer, is reachable at DGeiger@Observer.com and can also be followed at Twitter.com/DanGeiger79.
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Duane Reade Commits to Big Relocation at 40 Wall Street
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 New York City drugstore pharmacy giant Duane Reade has agreed to relocate its corporate offices to 40 Wall Street, the same Trump Organization-owned office tower that already houses its sushi-serving, hair-styling flagship megastore.
Duane Reade will be taking the 21st and 22nd floors, for a total of 54,500 square feet, inside the 72-story building. The lease is for 15 years, with asking rents in the mid-$30s per square foot, several brokers said.
Jeffrey Lichtenberg of Cushman & Wakefield represented the Trump Organization in the deal. Thomas Murray and Joseph Artusa, both of the Lincoln Property Company, handled Duane Reade.
Duane Reade’s current lease at its corporate headquarters at 440 Ninth Avenue was nearing its August expiration, prompting the pharmacy to look for new space in midtown, midtown south and Lower Manhattan, said Mr. Murray.
It was sometime after Duane Reade opened up its approximately 22,000-square-foot flagship at 40 Wall Street—which has a grocery space for smoothies and sushi and a special salon section that offers hair blow-outs and manicures—when it dawned on the company that having its corporate headquarters and superstore under one roof was the most logical choice, according to those familiar with the deal.
“The location is perfect, it laid out well for them and then, on top of that, there was the superstore,” said Mr. Murray.
Dealing with 40 Wall Street’s well-known landlord also helped seal the deal, said Mr. Artusa.
“Donald Trump Jr. was a complete gentleman throughout the entire process and was helpful in expediting the deal,” he said.
This has been a busy leasing period for Mr. Lichtenberg and his team, which have brought in the structural engineering firm Leslie E. Robertson Associates, financial consulting firm Huron Consulting and Weidlinger Associates, another structural engineering firm, in the past six months.
“The vacancy [rate] right now is about 18 percent,” said Mr. Lichtenberg. “It was close to forty percent when we took control [two and a half years ago],” he added.
Daniel Edward Rosen, Staff Writer, is reachable at DRosen@Observer.com and can also be followed at Twitter.com/Dedwardro.
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Travel Accessories Brand Expands at 261 Fifth Avenue
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 Luxury travel accessories maker Tumi is expanding its New York City office and showroom space at 261 Fifth Avenue, expanding from 9,735 square feet to 14,047 square feet.
Tumi will inherit showroom and workspace from textile company Chenab USA, which willdownsize its space on the 21st floor of the Feil Organization-owned building, said people familiar with the deal.
Randall Briskin and Brian Feil of The Feil Organization handled the lease negotiation for the building. Eugene Messina, Vice President of Global Real Estate for Tumi, represented the company in the deal.
Since buying the landmark Art Deco building five years ago, The Feil Organization has seen its building evolve from a roster primarily comprised of textile tenants to a mix of fashion and media businesses.
“We’ve been seeking out really well-established, high-end corporate names,” said Mr. Feil.
Dan Klores Communications took 30,000 square feet in the building in 2010, and The Badger & Winters Group—whose founder, Madonna Badger, recently lost family members to a tragic fire at her Stamford, Connecticut home—has agreed to take space on one of the top floors of the 26-story building.
Tumi, which has its corporate offices in South Plainfield, New Jersey, had an office at 261 Fifth Avenue for more than ten years. It had used its 20th and 21st floor offices as a design studio and showroom, and for sales meetings.
“The remaining portion of the 21st floor, which is what we’re taking over, is now going to be an expanded showroom and workspace,” said Michael Mardy, the Executive Vice President and Chief Financial Officer of Tumi.
“It was a space that was contiguous to our existing space and it felt right to expand the space,” he added.
Tumi could soon grow even bigger. Last month, it was reported that Tumi had filed regulatory documents as part of its plans to raise up to $300 million in an initial public offering.
Daniel Edward Rosen, Staff Writer, is reachable at DRosen@Observer.com and can also be followed at Twitter.com/Dedwardro.
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