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Category ArchiveJLL

Breast Cancer Research Foundation Moving HQ to Club Row Building

The Breast Cancer Research Foundation (BCRF) is moving its Manhattan headquarters to the Club Row Building at 28 West 44th Street in Midtown, where it has agreed to sublease 13,114 square feet of office space, Commercial Observer has learned.

The nonprofit signed a five-year sublease to take part of the sixth floor at the 22-story, 372,000-square-foot property between Fifth Avenue and Avenue of the Americas, according to sources with knowledge of the transaction. BCRF is taking over the space at the APF Properties-owned building from advertising software provider Mediaocean, the sublandlord in the deal.

The move will see BCRF nearly double its current footprint at 60 East 56th Street between Park and Madison Avenues, sources said. The organization is expected to relocate to its new offices at the Club Row Building before the end of March.

Asking rent in the deal was in the high $50s per square foot. Sam Seiler and Sinclair Li of CBRE represented BCRF in the transaction, while Kirill Azovtsev, Michael Pallas and Jim Wenk of JLL represented Mediaocean. A spokeswoman for CBRE declined to comment, while a spokesman for JLL did not immediately return a request for comment.

Other tenants at 28 West 44th Street include the City University of New York, the American National Standards Institute and film post-production studio Crew Cuts.

APF Properties partnered with PGIM Real Estate to acquire the building from SL Green Realty Corp. for $161 million in 2011. APF subsequently bought out PGIM’s stake to gain full ownership of the property in 2014.

Source: commercial

Entertainment Law Firm Mitchell Silberberg Moving Within Midtown East

Mitchell Silberberg & Knupp, a Los Angeles-based law firm, has signed an 18,650-square-foot deal at William Kaufman Organization’s 437 Madison Avenue to relocate its offices, according to the landlord.  

The law practice, which was founded in 1908, will occupy the entire 25th floor of the  40-story, 850,000-square-foot building between East 49th and East 50th Streets.  

The firm is mostly known for its ties to the entertainment industry and includes areas of focus such as digital media, intellectual property, corporate law and immigration, according to its website and is currently located nearby at 12 East 49th Street (also known as Tower 49) between Fifth and Madison Avenues. Mitchell Silberberg will move in August; the length of the deal is for 15 years, and asking rents in the building range between $82 per square foot and $110 per square foot.

Besides it’s Los Angeles and New York City digs, Mitchell Silberberg also has an office in Washington D.C.

The deal highlights “the special position that our property is in and reflects the ongoing resurgence of Midtown East,” Michael Lenchner, a vice president at Sage Realty Corporation—the leasing and management division of William Kaufman—said in prepared remarks.

Lenchner worked on the transaction for the landlord in-house alongside JLL’s Frank Doyle, David Kleiner, Cynthia Wasserberger, Hayley Shoener and Harlan Webster. Jared Freede of CBRE, who handled the deal for Mitchell Silberberg, did not immediately return a request seeking comment.

The New York Post first reported news of the transaction.

Source: commercial

Room for Improvement: The Value-Add Hotel Lending Space Is Heating Up

Hotels, like people, are sometimes in need of a little makeover.

Even more so in fact, given that an average hotel room has a shelf life of only seven or eight years before the cracks begin to show (quite literally) and its potential customers start eyeing its younger, shinier competitors down the street.

But, owners looking to give their property a facelift to boost occupancy and revenue per available room—whether through a renovation, a rebranding or a full repositioning—are in luck: The value-add hotel lending space has become increasingly competitive, which means lower costs of capital for borrowers and a myriad of capital sources eager to lend.

“It’s incredibly competitive out there, and it’s becoming more competitive,” said Matt Nowaczyk, a senior vice president in JLL’s hotels and hospitality group. “There was a tremendous amount of equity in the real estate space, and about 24 months ago those groups started putting their energies into mezzanine, preferred equity and senior lending instead.”

The wide bid-ask spread is part of the switch to the debt side. Sellers’ anticipation of higher purchase prices than the equity community is willing to invest has led to a slowdown in acquisitions and an increase in refinances.

“We’re not seeing a lot of trades in the market from an equity perspective. We’re finding better opportunities on the lending side because people are recapping existing deals,” said Greg Friedman, the CEO of Atlanta-based Peachtree Hotel Group, whose investment vehicles and funds are focused on investing in equity and debt positions on value-add hotels.

“There are a lot of new lenders in the space providing financing for transitional hotel assets,” Friedman continued. “You’re also seeing more collateralized loan obligations being formed that are financing these assets, in addition to private equity funds setting up a debt strategy.”

Debt fund capital is—by nature—value-add, and a lot of that capital is being raised by fund sponsors who have a knowledge of the hotel sector—providing the new competition with especially sharp teeth.

“Many [debt platforms] are sponsored by private equity firms who understand the product. I think it allows them to more competitively underwrite value-add executions,” said Daniel Peek, a senior managing director in HFF’s hospitality practice group. “The loans are a little higher leverage and a little higher cost, although the competition is actually keeping a lid on cost. It’s a very good market for value-add borrowers today.”

Also in the mix is the commercial mortgage-backed securities (CMBS) market. “The single-asset, single-borrower market has been strong for hotels for some time. Hotels are easy to underwrite as a single asset and easy to securitize,” Nowaczyk said. “CMBS has always been a very competitive product to the alternative lenders although CMBS lenders only play when the senior piece is in excess of $150 million—so whale hunting, really.”

Whale hunting indeed, but a CMBS execution creates additional competition for other lenders thanks to CMBS’ significant pricing power in providing higher leverage value-add loans.

A slowdown in demand and increase in supply, coupled with how late in the real estate cycle we are, meant that lenders and equity investors still proceeded with some caution last year.

Warren de Haan, the head of originations and a founding partner of ACORE Capital, said, “The investment sales market is a leading indicator of where people think the market is, and that dropped off significantly in 2017. But here’s the interesting point: The hotel market has done better than any of us thought and continues to do well—which is crazy, because we’re deep into the cycle and hotels are usually the most volatile asset class as their leases are up every night.”

But, lenders should be mindful of opportunities flowing from the slowdown in investment sales, de Haan said: “Just say you want $100 million [to sell] your hotel but you’re only getting bids at $85 million. Because the debt markets are so robust right now borrowers are saying, ‘Well let’s go to the refinancing market instead of the sale market.’ Borrowers will come to us for a 75 percent loan-to-value loan, but that loan is really an 85 percent loan to where someone would actually buy the property in today’s market. We [as a lender] have to be cautious when we get a loan inquiry, and ask, ‘Did it go through a sales process,’ and ‘Where were the bids?’ We have to make sure that the value is lining up with where the market clearing price for a sale would be so that we’re not overleveraging ourselves.”

So, why is the value-add hotel space so attractive right now? “A return premium at the internal rate of return level and a premium at the debt level,” Peek explained. “Generally, it’s a good market, and there’s an attractive yield out there.”

And, just as a stable asset appeals to certain investors and lenders, the ability to create value and reposition an asset is equally attractive to several capital sources today.

“We see an improvement in the stabilized loan-to-value in all of our assets as a result of new capital going in and rebranding,” de Haan said. “In a stabilized lending environment where the assets are stable, you don’t have that uptick because there’s no value-add story. But we love the value-add stories.”

Square Mile Capital Management has made 18 value-add hotel loans over the past three years. It defines “value-add” as assets that have some in-place cash flow but where cash flow is expected to increase over a period of time. The value-add component typically comes through making physical improvements to the property, through a property improvement plan (PIP), a renovation or a repositioning of the asset maybe through a rebranding or changing the franchise, or improving the management or operations of the property.

“Assets typically have an in-place debt yield of 7 or 8 percent but also have a business plan in place to get them to a double-digit debt yield over a 24- to 36-month period,” said Nolan Hecht, a managing director at Square Mile.

Square Mile’s loans typically have a five-year term with a 3-1-1 structure—a three-year base term for the sponsor to execute its value-add business plan with two one-year extensions.

When it comes to identifying an attractive value-add opportunity, Square Mile first looks to the quality of the sponsorship, Hecht said: “What’s their track record, have they done similar renovations or repositionings? Then we look at the feasibility of the business plan—what they’re proposing, does it make sense. Then we look at the asset quality and the local market dynamics.”

If those three considerations are strong, then Square Mile will lend 70 to 75 percent loan-to-cost on a hotel asset.

ACORE favors the whole loan approach in value-add lending, doing both the senior and the mezzanine part of the capital stack with an average loan-to-value of 65 to 70 percent.

“A typical inquiry would be a borrower asking for 65 to 75 percent of the cost of the purchase price plus 60 to 75 percent of capital that they need to invest in the hotel in order to reposition it,” de Haan said. “Once it’s repositioned and stabilized they typically go and sell the asset.”

A value-add hotel lending opportunity recently caught ACORE’s eye in Houston—a market hit hard by Hurricane Harvey as well as the lagging energy sector. “Have the full effects of Houston be felt? Probably not, but you have a Class-A hotel in a great location where the net operating income has been hammered, the asset needs money and the seller is selling it a fraction of replacement costs,” de Haan said.

Bolstering the asset’s story (ACORE is currently considering the deal, so de Haan couldn’t name the property) is its lack of direct competitive supply. “It will be very difficult to replicate and the cost would be way higher—$500,000 a key versus our borrower’s basis at $200,000 a key,” de Haan explained. “So that’s an interesting, risk-adjusted story. The cash flows could suffer for the next two years but fundamentally the value of the asset, coupled with a strong sponsor putting in new capital and upgrading the asset, will come back. And at our dollar basis it feels impossible to get hurt.”

While hotels comprised 25 percent of ACORE’s lending volume four years ago, that amount dipped to 15 percent in 2017, indicative of the caution around new supply outstripping demand.

An asset’s potential to compete with other properties in the area is key, de Haan said.

“We can look at a competitive set of assets and see that our hotel’s average daily rate and occupancy is at the bottom of these four hotels,” De Haan said. “Let’s say the other hotels have nicer features in their rooms than we do, nicer restaurants, but our location is very good—that’s a story I look for. Because if we replace the furniture, fixtures and equipment (FFE) in the room, if the borrower puts in a new restaurant concept and if demand exists in that market it’s not a stretch to think its rate and occupancy should be equal to—or better than—the comparable hotels. We don’t have to believe in the market, but if it improves, we exceed our underwriting significantly. But, we don’t bet on that—that’s a bet that the equity is making, not us.”

Speaking of equity, there’s a debate underway around whether having an equity side to your business is a positive or negative calling card in the value-add hotel lending space.

Square Mile has separate debt and equity platforms but—like others—has seen more action on the debt side recently. “We’re out hunting on both sides,” said Hecht, who believes that having both platforms is beneficial because Square Mile has an understanding of which value-add business plans make sense and which markets are attractive.

“If you have a deeper understanding of the minutiae, location, brand, manager, positioning, I think you can more effectively underwrite value-add financing,” Peek agreed.

Peachtree’s lending platform, Stonehill, is five years old, but Peachtree has been an equity inverstor in the value-add hotel space for 10 years. Friedman sees this as an advantage: “We can understand the credit and what’s happening; it allows us to do deals that are a little more difficult for other lenders because they may not have that knowledge.”

ACORE, on the other hand, doesn’t have an equity platform. De Haan sees ACORE’s position as a pure-play transitional lending shop as an advantage because the firm is not viewed as a threat.

“We’ve concluded that about 10 percent of the $5 billion in business we won last year was because we’re not viewed as competitors on the equity side,” de Haan said. “Those borrowers made the decision that they don’t want to share confidential information on their business plans with their biggest competitors.”

Some wary borrowers will strike a lender with an equity platform from the list of potential capital sources right away, Nowaczyk said. “That said, the capacity of some of those firms is significant, and it’s clear their business plan is making money off debt, not out of trapping guys and taking their assets,” he said.

Boston-based UC Funds provides both equity and debt. It recently made a $75 million direct equity investment in two adjacent hotels on Stamford, Conn.’s restaurant row; an existing Courtyard Marriott; and a half-complete Residence Inn. UC Funds picked up the two assets at a discount and intends to add value by managing both properties under one management company.

“This is a value-add situation where you can buy something unfinished and combine it with an operating hotel with shared resources and amenities,” Daniel Palmier,  the president and CEO of UC Funds, explained. “The Courtyard Marriott has a great valet service and pool. We took the opportunity when we bought the Residence Inn to expand the gym from 900 square feet to 1,400 square feet and we don’t need a pool because there’s already one at the Courtyard. So we’re adding value by operating these two hotels symbiotically.”

UC Funds began a PIP on the Courtyard Marriott six months ago, updating the FFE and lobby from its 2004 decor. The Residence Inn is now around 75 percent complete with hip furniture, a baby grand piano in the lobby, a modern bar and outdoor space on a mezzanine level in its future. “It’s going to be a really sexy hotel product,” Palmier added.

As a result of the renovation, “We’re going to cut cost on a room-by-room basis of around 30 percent,” Palmier said. “We now have one general manager for both properties, and we have one valet instead of adding another, so there are efficiencies across the board.”

There’s no doubt that a big-brand hotel name is preferred by some lenders.

“We love lending in the branded space, be it Hilton, Marriott or Hyatt. That will always be a high proportion of our lending business,” Hecht said. “But where it makes sense, we’ve also been lenders on strong lifestyle hotels in the right market. In general, it’s just easier for branded hotels to attract debt capital.”

Square Mile has made 10 loans on Embassy Suites hotels.

“These are 1980s or 1990s assets, and when they haven’t been renovated, they get tired and their market penetration drops down to 100 percent,” Hecht said. “So we’ve been doing loans for the renovations, for the PIPs and then once these assets are renovated the Embassy Suites typically spring back to 110 or 115 percent penetration. They are assets that are doing well—they just need a renovation to bounce back.”

For now, one capital source not competing quite so fiercely with those in the value-add space is the banks.

“An average bank is not going to do more than 50 percent [leverage] on a hotel,” Palmier said. “We go up as high as we feel comfortable. We’re not regulated, we’re a private capital provider, and because we understand the space and the intrinsic value, we can go up to 80 to 90 percent sometimes.”

But that’s not to say there isn’t room at the table for everyone, Friedman said: “I think this is a space where banks are becoming comfortable with allowing alternative lenders like us to fill the void. In some cases we’re partnering with regional banks and community banks who want us in as a participant with them, and we’re taking on that higher risk position in the loan.”

Source: commercial

Humanscale Nabs 33K SF for New HQ at Grace Building

Humanscale, a designer and manufacturer of ergonomic office products, will be relocating its U.S. headquarters from 11 East 26th Street to the Grace Building, Commercial Observer has learned.

The company has leased 33,000 square feet for the entire 15th floor at the Midtown West building with an address 1114 Avenue of the Americas on Bryant Park. The deal is for 10 years, according to Brookfield Property Partners, which owns the building with The Swig Company. The space will house Humanscale’s headquarters as well as a design studio.

Brookfield declined to provide the rent, but on the building’s lower floors, the asking rent is in the high-$80s per square foot.

“Our new headquarters in the Grace Building represents a great opportunity for Humanscale to establish a space that is welcoming to our clients and reflects the values of our brand,” Humanscale Founder and CEO Robert King said in a statement. “The location of this iconic New York building will be a great benefit for our team as we open it up to more visitors and events.”

Once Humanscale moves in later this year, it will be able to have all employees on one floor. “Most importantly to King, the new location will feature a design that speaks to the brand’s core values: functionality, simplicity, longevity and sustainability,” according to a press release from Brookfield.

The property between West 42nd and West 43rd Streets is a 49-story, 1.6-million-square-foot office building, which includes 42,000 square feet of retail and a 30,000-square-foot outdoor plaza. Tenants include Gabriel Kreuther, Bluestone Lane, Joe & the Juice, Kreuther Handcrafted Chocolate, Sweetgreen and STK.

“In addition to designing and manufacturing high-performance products that are simple, functional and that stand the test of time, we are committed to achieving a net positive impact on the earth,” King said in prepared remarks. “This imperative will be top of mind as we specify products and materials for the new space.”

JLL’s Deb van der Hayden and Paul Ferraro represented Humanscale in the deal. Brookfield was represented in-house by Duncan McCuaig and Alex Liscio, alongside CBRE’s Ken Rapp, Peter Turchin, Sara Pontius, Zak Snider and Cara Chayet. Spokespeople for JLL, CBRE and Humanscale didn’t respond with a comment.

Source: commercial

Two Tenants Take Space on 50th Floor of Empire State Building

RaySearch and BTS USA have both signed leases with Empire State Realty Trust at the public company’s Empire State Building on the 50th floor, Commercial Observer has learned. The remaining 2,077 square feet on the floor, which is pre-built, is vacant.

Sweden-headquartered RaySearch, which develops software used in radiation therapy of cancer, took 12,800 square feet and BTS, a global professional services firm, signed for 11,600 square feet, at the iconic 102-story, 2.8-million-square-foot skyscraper at 350 Fifth Avenue between West 33rd and West 34th Streets. Their leases are each for 10 years with an asking rent of $72 per square foot, according to a spokeswoman for the landlord.

Both tenants will move in this summer. At the Empire State Building, RaySearch will be opening its first New York City office for its U.S. headquarters and BTS will be relocating from smaller digs at One Grand Central Place, the ESRT spokeswoman said.

Dan Schwartz and Peter Rosenlow of Winslow & Company represented RaySearch in the lease negotiations. JLL’s David Dusek and Simon Landmann of JLL worked on behalf of BTS in its deal. Shanae Ursini of ESRT represented the landlord in-house for both transactions along with JLL’s Paul Glickman, Jonathan Fanuzzi, Kip Orban and Harley Dalton. No one from Winslow responded to a request for comment and nor did JLL’s spokesman.

Thomas P. Durels of ESRT said in a prepared statement that the tenants opted for the Empire State Building because of its “worldwide brand recognition and urban campus amenities.”

Those amenities include a 15,000-square-foot tenant-only fitness center and a tenant-only conference center, as per CoStar Group.

Other tenants in the 1,454-foot building include 80-year-old architecture company Corgan in 11,500 square feet on the 54th floor and Vanguard Construction & Development Co. in a 15,150-square-foot sublease with Yahoo for part of the internet giant’s space on the 55th floor.

Update: This story has been edited to reflect that RaySearch and BTS USA have leased part of the 50th floor.

Source: commercial

Maryland Transport Systems Solutions Company Moving Into Garment District

Annapolis, Md.-based Aeronautical Radio, a major provider of transport communications and systems engineering solutions founded in 1929, is moving into the New York City market with an office in the Garment District, Commercial Observer has learned.

Aeronautical Radio has taken 8,000 square feet on the second floor of the 12-story building at 225 West 39th Street via a 10-year lease, according to information provided by Walter & Samuels. An investment group led by Walter & Samuels Chairman David I. Berley owns the 1910 property between Seventh and Eighth Avenues, which comprises 90,000 square feet of office lofts, showroom and retail space.

The asking rent for the space, vacant for a little over six months after Manhattan Fencing moved out, was $48 per square foot, a Walter & Samuels spokeswoman indicated. The lease was signed on Dec. 12 and Aeronautical Radio will assume the space in the first quarter of 2018.

Mark Jaccom, who left JRT Realty for a newly created position at Walter & Samuels, and Walter & Samuels Ian Weiss represented the owner in the deal. Justin Haber, Steve Rotter and Kyle Rike of JLL represented the tenant. A JLL spokesman didn’t respond with a comment from the brokers.

“We want to create a rich and diverse tenancy at this historic Garment District building, and are thrilled to have secured a major public company like [Aeronautical Radio],” Jaccom said in a prepared statement. “With great historic bones and a fully modern interior, we anticipate that the building will diversify over the years to include more media and tech, reflecting the evolution of the neighborhood overall and the available local amenities.”

CO reported in April that Gracia Fashion signed a 10-year lease for 5,000 square feet of ground-floor retail space and 4,500 square feet of lower-level space at the building. Israeli American fashion designer Yigal Azrouël is also a tenant.

Source: commercial

Ad Agency Momentum Worldwide Heads to 60K SF at Brookfield Place

Ad agency Momentum Worldwide is packing up its Hudson Square offices and heading Downtown to Brookfield Place.

The Interpublic Group subsidiary has signed on for 60,000 square feet via a 10-year lease at Brookfield Property Partners300 Vesey Street, The Real Deal reported. Momentum’s new home includes the entire top floor of the 15-story building, part of the 14th floor and a private roof deck. Asking rent in the deal wasn’t immediately available.

JLL’s Scott Panzer, Robert Romano and Shannon Rzeznikiewicz represented Momentum in the deal, and it’s unclear who handled the transaction for Brookfield. Neither company’s spokesman responded to a request for comment.

Momentum will decamp its current space on the second and third floors of Jack Resnick & Sons250 Hudson Street for Brookfield Place in May 2018, according to information from CoStar Group.

In recent years, the marketing company, which has 2,000 employees and 40 offices, has run campaigns for American Express, Chevron, Microsoft, Coca-Cola, SAP and Verizon, as well as many other high-profile clients.

Other tenants in the 522,000-square-foot, 21-year-old building include CME Group, Pell Brothers Trading, Smith & Moore and KCG Holdings, CoStar indicates.

Source: commercial

Monday Properties Doubling Office Space With 16K-SF Lease on East 55th Street

Real estate investment firm Monday Properties has signed a lease for 16,336 square feet at Park Avenue Tower at 65 East 55th Street, in a move to double its presence in Manhattan, Commercial Observer has learned.

Monday Properties will be taking the entire 27th floor at the Equity Office-owned property between Park and Madison Avenues, through a 16-and-a-half-year lease, a source told CO. The asking rent was between $135 and $140 per square foot.

The firm will relocate in the third quarter of 2018 from 667 Madison Avenue between East 60th and East 61st Streets, where it occupies 8,460 square feet, due to “organic growth,” the source said.

Equity Office purchased the 36-story, 615,000-square-foot tower in 2014 for $750 million. Last year, the company committed $25 million for its renovation, as CO previously reported.

Tenants include Eminence Capital, Cyrus Capital Partners, King Street Capital, National Bank of Canada, ICM Partners and Tower Brook Capital Partners.

JLL’s Alexander Chudnoff and Benjamin Bass represented Monday Properties in the deal and Newmark Knight Frank’s Jared Horowitz, Brian Waterman, Lance Korman, Ben Shapiro and Brent Ozarowski worked on the landlord’s behalf. Spokesmen for both companies didn’t respond with comments.

Source: commercial

JLL Boosts Capital Markets Team with Two New Hires

JLL’s Aaron Appel has added two professionals to his capital markets team in New York, Commercial Observer has learned. David Sitt and Eliott Zeitoune have joined the brokerage with a focus on providing advisory services to owners, borrowers and capital providers. The duo will also focus on investment sales in the greater New York market.

“David Sitt and Eliott Zeitoune are consummate professionals with strong backgrounds in representing the needs of clients in a wide variety of industries,” Appel said. “Within just a few months, the pair have been involved in the origination of nearly $1 billion in debt and equity. Given such a strong start, we expect David and Eliott to serve an important role in further expanding JLL’s presence in the market.”

Sitt was previously the founding partner of real estate brokerage firm Sitt Ventures. Prior to that, he was an investor in Wharton Realty Group.

Sitt also founded The Sephardic Food Fund—a charitable organization that distributes funds through J.P. Morgan Chase visa credit cards that are only accepted in supermarkets and grocery stores. The fund has distributed $26 million to date.

Zeitoune joins JLL from brokerage Hudson Real Estate Partners, where he represented tenants in office leasing transactions.

As CO first reported, JLL appointed Appel as head of debt and equity finance for its New York capital markets practice in September.

Source: commercial

Coworking Company Spaces Establishing NYC Flagship in 100K SF at Manhattan West

Brookfield Property Partners six-building Manhattan West megaproject is getting a major coworking tenant.

Amsterdam-based workspace provider Spaces has leased 103,000 square feet across seven floors in a building known as The Lofts at 424-434 West 33rd Street, the landlord told Commercial Observer. The coworking company will take the seventh through 13th floors in the top half of the former printing loft building between Ninth and 10th Avenues.

The asking rent in the 10-year deal was in the high $70s per square foot, according to David Cheikin, an executive vice president at Brookfield. Spaces will get its own private entrance and lobby, as well as a 2,000-square-foot rooftop and multiple terraces. The building has 15,000-square-foot floor plates, exposed steel beams, and high ceilings, plus newly revamped elevators, lobbies and mechanicals.

“Our average tenant size at Manhattan West is 200,000 square feet,” Cheikin said to CO. “We wanted to provide those tenants with the ability to grow and shrink a bit and provide them WITH the resources for conferencing and flexible work environments.”

He also explained that the loft building will connect to Manhattan West’s 250,000 square feet of retail, anchored by a 60,000-square-foot Whole Foods.

Brookfield had originally planned to knock down 424-434 West 34th Street in order to amass a larger site that would allow for a big retail and hotel project, Cheikin said. “But when we actually got into the building, we realized it was a really good turn-of the century printing loft building that added some authenticity to our site of what the neighborhood used to be.”

Spaces is planning to make The Lofts its flagship outpost in the five boroughs, where it already has 44 locations and 1.3 million square feet of offices, according to Michael Beretta, the vice president of network development in Spaces’ Americas division. This will also be its largest space in the city, where typical Spaces locations average 30,000 to 50,000 square feet apiece.

JLL’s Jim Wenk, Brannan Moss and Kirill Azovtesv represented Spaces. Cushman & Wakefield’s Bruce Mosler, Josh Kuriloff, Robert Lowe, Ethan Silverstein, Matthias Li and Whitney Anderson worked on behalf of Brookfield.

Mosler declined to comment on the deal, and a spokesman for JLL didn’t immediately respond to a request for comment.

The seven floors will be constructed with movable walls, prebuilt suites, large coworking areas, conference rooms and event spaces. The interiors are going to be renovated with a “cool and contemporary design that’s European in nature and a mix of casual and interesting while still remaining a very professional place where companies can do business,” Beretta said. He added that the company chose The Lofts because it’s a building with “character” but the project will offer all the amenities of new construction, including a significant retail component.

Spaces already rents at a few other Brookfield properties, including 245 Park Avenue, 1 Liberty Plaza and Brookfield Place. It expects to open at Manhattan West in late 2018.

Pioneering, Luxembourg-based coworking provider IWG Plc (formerly Regus) owns Spaces, which has tried to pitch in urban markets as a trendy competitor to WeWork

The lower half of 424-434 West 34th Street is currently home to several small office tenants. All of them will be vacated by 2021, when Brookfield plans to put the building’s remaining 100,000 square feet of office space on the market.

Source: commercial