Crains New York - July 15, 2013 - (Page 12)

REAL ESTATE DEALS PLUS GroupM puts 3 WTC on map T he news that advertising firm GroupM is close to signing up for more than 500,000 square feet at 3 World Trade Center has downtown real estate executives heaving a mighty sigh of relief. Rumors had persisted for months GroupM and other tenants were in the hunt for space at the WTC site, but the deal had appeared stalled until this week’s announcement that the company had signed a letter of intent to proceed with a transaction. In the meantime, several large tenants—including Coach and Time Warner—inked agreements for space in the new Hudson Yards development west of Penn Station in deals that appeared to hand the momentum to the far West Side site. “The Hudson Yards and the WTC site will always be in competition, but I think this deal shows that both can live,” said Peter Riguardi, New York area president of brokerage company Jones Lang LaSalle. Heightening the competition is the fact that new leasing, especially among big tenants, has continued to be slow at a time when the city’s economy has seen little job growth. “These sites have gotten a lot of success without a lot of growth,”Mr. Riguardi noted. The move by GroupM, owned by Britain’s WPP Group,would further a trend of creative-sector outfits migrating downtown.Two years ago, Condé Nast signed a 1 millionsquare-foot-plus lease at 1 WTC. The GroupM deal “enhances the area’s brand as a place for media and creative companies,” said Brian Waterman, a leasing broker at Newmark Grubb Knight Frank. The letter of intent at 3 WTC, a 2.5 million-square-foot spire planned by Silverstein Properties, is not a done deal, but is an important precursor to one. Crucially, the deal would allow Silverstein to move forward with the tower, which had been capped at seven stories, and receive a package of $600 million in subsidies from the Port Authority of New York and New Jersey,which owns the site,and from the city and state. Architect warms to next ‘hot spot’ Feeling priced out of the nation’s hottest real estate market, midtown south, TPG Architecture is relocating to what it is betting will be the next neighborhood to catch on. The firm is taking 42,000 square feet at 132 W. 31st St. in the garment district. While many office tenants balked at moving to the gritty area a few years ago, the kickoff of work on Hudson Yards and other developments west of Penn Station has brought a new glimmer of sexiness to the area. “Candidly, midtown south neighborhoods … have gotten too pricey, so we set out to do something that we believe is smart,” said Jim Phillips, founder and chief executive of TPG Architecture. Asking rents per square foot under the 11-year lease were in the $40s, at least $10 less than what it would have cost the firm to renew its current lease at 360 Park Ave. South. TPG Architecture is also hoping its new location will position it to win a boatload of new business. The firm specializes in interior architecture for office and retail spaces. “The west is where the next wave of development is,” Mr. Phillips said. Mark Ravesloot, a broker at CBRE Group, represented TPG Architecture with colleague Michael Monahan in the deal. The lease is the biggest that 132 W. 31st St.’s landlord, Savanna, has arranged since acquiring the property in 2011 with several floors of vacant space. Kevin Hoo, an executive at Savanna, said the company, using a leasing team from Jones Lang LaSalle led by broker Mitch Konsker, now has several deals in the works. BARE BONES Firm invests in more space TENANT; REPS: St. Petersburg Global Trade House; Tatiana Jung and Richard Smith of Winick Realty Group Investment firm Angelo Gordon is adding a floor to its headquarters at 245 Park Ave. The company, which specializes in alternative investments, including real estate, is taking the 24th and 25th floors in the tower. The deal amounts to the addition of one floor because Angelo Gordon will be moving from space it has on the building’s 35th floor. According to Jerry Larkin, a senior executive at Brookfield Properties, the 1.8 million-square-foot building’s landlord, Angelo Gordon is doing the deal to accommodate its growth and to align its floors in a contiguous stack. Angelo Gordon’s 261 FIFTH AVE. ASKING RENT; TERM: $165 per square foot; 10 years SQUARE FEET: 1,100 LANDLORD; REP: Feil Organization; in-house representation BACK STORY: The 15-year-old Russian souvenir shop, which boasts three locations in Brooklyn, will open its first Manhattan location. other existing space in the tower is on the 26th floor. The expansion amounts to a net addition of about 50,000 square feet. The company now occupies a total of about 110,000 square feet. “This is a financial firm that’s growing and doing extremely well,” Mr. Larkin said. A leasing team from Newmark Grubb Knight Frank, led by the company’s New York area President David Falk and broker Peter Shimkin, handles leasing at the tower on behalf of Brookfield Properties. The deal, which expires in 2026, was arranged directly with Angelo Gordon. —daniel geiger $ 1 000,000,000 , Accelerate the growth of your international business with HSBC. Global markets are opening up to everyone. In fact, 65% of American businesses are currently involved in international markets1. That’s why HSBC has earmarked $1 billion in funding to help qualifying American businesses better manage international expansion and take advantage of global growth opportunities2. There’s a new world emerging. Work with HSBC to be part of it. 1-866-257-3768 us.hsbc.com/accelerate 1. Source: Dun and Bradstreet. Total number of businesses greater than $3 Million in annual revenue doing business internationally or planning to do business internationally. 2. Applies to qualifying loans offered by HSBC Bank USA, N.A to businesses with sales turnover between $3 Million and $500 Million. Other restrictions may apply. United States persons (including entities) are subject to U.S. taxation on their worldwide income and may be subject to tax and other ﬁling obligations with respect to their U.S. and non U.S. accounts. US persons and entities should consult a tax advisor for more information. 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Table of Contents for the Digital Edition of Crains New York - July 15, 2013

Crains New York - July 15, 2013
IN THE BOROUGHS
IN THE MARKETS
SMALL BUSINESS
THE INSIDER
BUSINESS PEOPLE
OPINION
STEVE HINDY
GREG DAVID
REAL ESTATE DEALS
REPORT: HEALTH CARE
CLASSIFIEDS
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - July 15, 2013