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Category ArchiveOffice

Flexible Office Provider NYC Office Suites Inks Two Deals in Midtown

NYC Office Suites, which provides flexible office space, has signed a lease for 40,000 square feet in Rockefeller Center and a sublease for 30,000 square feet in the Citigroup Center, Commercial Observer has learned.

The larger of the two deals is in Tishman Speyer’s 1270 Avenue of the Americas between West 50th and West 51st Streets, with the company taking the entire seventh and eighth floors.

Avital Shimshowitz, the senior vice president of sales and marketing for NYC Office Suites, told CO that the company liked the building for a number of reasons: its location, it neighbors the entrance to Radio City Music Hall, Tishman’s Zo amenity package, the fact that the Rainbow Room is tenants-only for breakfast and lunch, it’s on top of a transportation hub and is along what she called “corporation row.”

On the eighth floor, NYC Office Suites will be converting a corner conference room into a business lounge and it will have a door to an outdoor furnished terrace for clients.

The lease is for 15 years and the asking rent was in the low $70s per square foot, Shimshowitz said.

Sean Black, the founder of BLACKre, represented NYC Office Suites in the deal. He wasn’t immediately reachable. It wasn’t clear who represented Tishman as a spokesman didn’t respond to a request for comment. 

601 lexington avenue photo costar group Flexible Office Provider NYC Office Suites Inks Two Deals in Midtown
601 Lexington Avenue. Photo: CoStar Group

NYC Office Suites clients will start moving into 1270 Avenue of the Americas on April 2, Shimshowitz said. Other tenants at the 31-story 528,900-square-foot office tower include Premiere Networks, Venable and FTSE Americas.

Crain’s New York Business was the first to report on this deal.

In the smaller deal, NYC Office Suites—which caters to mid-career professionals and “falls between Regus and WeWork,” Shimshowitz said—has taken 30,000 square feet in the Citigroup Center at 601 Lexington Avenue at East 53rd Street via a sublease with Citibank. The space is on the 20th floor.

“Our clients base—the core of it is financial services, legal and executive search firms,” Shimshowitz said, so the Citigroup Center was a logical choice for an outpost. In addition the Citigroup Center is in a good location for commuting and offers great views, she added.

Shimshowitz declined to cite the asking rent in the sublease, but CoStar Group indicates building asking rents range from $50 to $100 per square foot. The sublease is for less than 10 years.

Louis Buffalino of Cushman & Wakefield represented NYC Office Suites in the Citigroup Center deal. A spokesman for C&W didn’t immediately respond to a request for comment. It wasn’t clear who represented Citibank in the deal. Boston Properties owns the 59-story, 1.4-million-square-foot building where tenants include Kirkland & Ellis, the Blackstone Group and Citadel Investment Group.

While that NYC Office Suites space isn’t ready in Citigroup Center, “people wanted to move in,” Shimshowitz said, so the first client will set up shop next Thursday.

Thirty-year-old NYC Office Suites has four operating New York City locations—one each at Greybar Building at 420 Lexington Avenue, the Commerce Building at 708 Third Avenue, 733 Third Avenue and 1350 Avenue of Americas, with the last one being the company’s largest outfit at 75,000 square feet.

Source: commercial

Carver Federal Savings Bank Plans to Move Its Headquarters Down the Block

After selling its West 125th Street headquarters last month, Carver Federal Savings Bank is moving its offices a couple blocks east to the Lee Building at 1825 Park Avenue.

The country’s largest African-American-run bank inked a deal for 20,000 square feet on the entire 12th floor and part of the seventh floor at the 12-story, Savanna-owned office building, according to brokers involved in the deal. Asking rent in the 10-year transaction was $47 a square foot, said Eric Yarbro of Colliers and Madison Square Realty, who represented Carver in the sale and the lease.

Carver will pack up its current 25,000-square-foot headquarters at 75 West 125th Street and move into its new home at the corner of East 125th Street in six months. The bank sold 75 West 125th Street to Gatsby Enterprises for $19.45 million in February, as Commercial Observer reported two weeks ago. The local Harlem institution will, however, keep its retail bank branch on the ground floor of 75 West 125th, which is between Malcolm X Boulevard and Fifth Avenue.

Mitch Arkin of Cushman & Wakefield and Ellen Israel of JRT Realty handled the lease for Savanna.

Carver sold its building after reporting a net loss of $2.2 million last year, according to Crain’s New York Business, which first reported on the lease. The bank has struggled since the financial downturn in 2011, when it received a $55 million bailout from a group of investment firms and the federal government.

The previous owner of 1825 Park was Eugene Ginscombe, who owned the property for nearly 40 years before selling it to Savanna for $48 million in December 2015. Ginscombe, known as the “Mayor of 125th Street” and one of the city’s few prominent black developers, died in July 2016, seven months after the sale was finalized.  

Yarbro told CO that Carver chose the turn-of-the-century building because of Ginscombe’s legacy. “The Lee building was owned by one of the few African-American landlords in all of New York City. There was some historical significance to that.”

He added that, “Savanna gave them comfort that it would continue to be run well. The Harlem market has more family owners than institutional owners, so they’re one of the few institutional owners operating an office building in Harlem.”

Arkin touted the building’s location and nearby transportation options, which includes the 4 and 5 trains on Lexington Avenue and the adjacent Long Island Railroad stop on Park Avenue.

“I think the building has a lot of benefits for any kind of tenant that wants good transit access,” he said. “It’s great for Westchester, Bronx or Manhattan residents. And it has amazing southern and westerly views.”

Source: commercial

LA’s First Coworking Space for the Cannabis Industry to open in Hollywood

Los Angeles’ first coworking space exclusively dedicated to startups and freelancers in the cannabis industry is set to open in Hollywood on July 1, according to an official release from Paragon, which bills itself as the “leading blockchain tech platform for the cannabis industry.”

The venture, Paragon Space, has leased 4,364 square feet at 1463 Tamarind Avenue, financed fully through Paragon’s cryptocurrency, PRG (ERC20 token). In addition to being the first cannabis-centered coworking space in L.A., Paragon bills the deal as one of the first all-crypto real estate deals of its kind. They raised approximately 550 Bitcoin and 8,100 Ethereum, according to Paragon.

As of Jan. 1, California joined several other states that have legalized the recreational use of marijuana. Nonetheless, traditional business services including, most notably, banking, have shied away from servicing the industry overall. Despite the fact that 29 states have legalized the possession and sale of marijuana for medical uses, and eight of those have approved cannabis for recreational purposes, federally regulated banks have refrained from handling industry funds given that the drug remains illegal under federal law, as the Los Angeles Times reported late last year.

The Hollywood space will include tiered amenities, with desks and offices only accessible to PRG currency holders—Paragon’s cryptocurrency, Paragon CEO Jessica VerSteeg told Commercial Observer. Members of the greater cannabis community will have access to public spaces, meeting rooms and a communal area that includes a café. (The café will also require PRG coin currency.)

The location was crowdsourced by PRG currency holders between August 15 and October 15, 2017, where community members used PRG Coin to vote. VerSteeg said her company has about 10,000 PRG holder/members.

Paragon plans to have various operational systems rolled out by April 20, including a coworking space application and reservation system. The team will also release its first version of the online seed-to-sale tracking system with mobile app. VerSteeg said the seed-to-sale tracking system is the main product of the platform that “allows full transparency, verifiability, and increased efficiency for business and consumers.”

Within the Paragon space, flex desks, lounging areas and offices will be available to rent. Members of the community will also have access to conference rooms to host their own events and meetings, according to an official company release. The cost of renting the space in PRG will be calculated based on the floor plan and its capacity, however Paragon said it expects the average price to rent to be much more affordable when compared to the wider Greater Los Angeles office market, which according to a fourth-quarter 2017 Colliers International market report, averaged $3.03 per square foot.

The lounge and outside area of the building will provide additional space for meetings and events as well as a communal area.

Baky Soumar of PITCH Concepts, a Chicago-based design firm with a focus on customized urban rooftop decks and backyards, is expected to lead design renovations aimed at transforming the building into a high-tech hub.

To further their mission, Paragon is also engaged in discussions with FUNDANNA, an online regulated crowdfunding platform for cannabis businesses where retail investors have the opportunity to invest in cannabis startups.

“FUNDANNA provides a great means of raising capital, while Paragon Spaces functions as a hub for building out new businesses,” said VerSteeg.

Source: commercial

Hedge Fund Kepos Capital Inks 20K-SF Lease at 11 Times Square

Alternative investment firm Kepos Capital has agreed to move its Manhattan headquarters to a 20,000-square-foot space at SJP Properties11 Times Square, Commercial Observer has learned.

Kepos signed a 10-year deal last month for part of the 35th floor at the 40-story, 1.1-million-square-foot office tower at 640 Eighth Avenue between West 41st and West 42nd Streets, according to sources with knowledge of the transaction.

The firm is expected to relocate to its new Midtown West space in August from its current location just one block south at the New York Times Building at 620 Eighth Avenue, where it presently occupies around 17,000 square feet on the 44th floor.

Asking rent in the deal was not immediately clear. Paul Glickman and Diana Biasotti of JLL represented landlord SJP—which owns 11 Times Square in partnership with PGIM and Norges Bank—while CBRE’s Ben Friedland and Michael Movshovich represented Kepos

In a statement, SJP CEO Steven Pozycki said Kepos wanted to “maintain its presence in the city’s premier transit hub,” referring to 11 Times Square’s proximity to Port Authority Bus Terminal across Eighth Avenue and Penn Station several blocks south. “For today’s financial services firms, it’s critical to have an office that provides state-of-the-art connectivity and is outfitted with the latest technology infrastructure,” he said.

Matt DesChamps, Kepos’ COO, said in a statement that the new space’s larger footprint and the firm’s “ability to design the space to our requirements” provided it the “opportunity to create a customized work environment to serve our clients and support our growing business in the years ahead.”

“Kepos Capital joins a roster of leading financial and technology firms attracted to one of the city’s most advanced and sophisticated commercial towers,” JLL’s Glickman said in a statement to CO. Law firm Proskauer and tech giant Microsoft anchor the office building, which was completed in 2010.

Representatives for CBRE did not immediately provide comment.

Kepos was founded in 2010 by former Goldman Sachs partners Mark Carhart, Giorgio De Santis and Bob Litterman, who previously led the quantitative investment strategies division at Goldman Sachs Asset Management. The firm manages $3 billion in assets for a global base of institutional investors.

Madrid-based amusement park operator Parques Reunidos signed a lease last year to anchor 11 Times Square’s retail space, where it is developing a 45,000-square-foot indoor entertainment complex, known as Lionsgate Entertainment City, in partnership with film studio Lionsgate.

Source: commercial

Knotel Takes More Office Space in NoMad, Penn Plaza

Office provider Knotel is opening another two Manhattan locations spanning a combined 16,000 square feet, the company announced today.

At 102 Madison Avenue, Knotel signed a 10-year lease for the entire 10,000-square-foot fifth floor at the 12-story, 128,000-square-foot building on the northwest corner of East 29th Street in NoMad.

Broker Andrew Weiss of Signature Partners represented the firm in the transaction, while Robert Silver and Anthony Sciacca of Newmark Knight Frank represented the landlord, Westchester County-based family-owned firm A. Ruth & Sons Real Estate. Weiss confirmed the deal but declined to provide additional comment, while a spokeswoman for NKF did not immediately provide comment on the transaction.

Additionally, at 115 West 30th Street in the Penn Plaza area, Knotel announced a five-year “management agreement” that will see it take 6,000 square feet on the fifth floor of the 12-story, 166,000-square-foot building between Avenue of the Americas and Seventh Avenue.

It was not immediately clear whether or not the management agreement at the property also took the form of a lease. Eugene Lee, Knotel’s global head of real estate and business development, said in a statement that such management deals “enable owners to immediately increase income from their spaces by introducing flexibility into their buildings, while allowing Knotel to expand its footprint quickly on favorable terms.”

The transaction at 115 West 30th Street was a direct deal between Knotel and landlord Justin Management, the office provider said. Representatives for Justin Management could not immediately be reached for comment.

Asking rents in both agreements were not immediately clear. Knotel—which provides flexible, short-term office arrangements to companies who take their space from the firm—said it expects both locations to open in the early second quarter of this year.

Source: commercial

Logistics Startup Flexport Moves From Flatiron District to Chelsea

Freight logistics software startup Flexport has outgrown its New York City office and has leased a larger space across town.

The air and ocean freight forwarder has inked a deal for 23,000 square feet on the entire second floor at Kaufman Organization’s 111 West 19th Street between Avenue of the Americas and Seventh Avenue, Crain’s New York Business reported. Asking rent in the deal was $65 a square foot, according to information from CoStar Group. The length of the lease wasn’t immediately available.

It wasn’t clear what brokers were involved in the transaction, but Kaufman Organization’s Sam Stein and Yvonne Chang marketed the space. Stein declined to comment on the deal. Flexport didn’t return a request for comment.

Flexport had outstripped its current home, an 11,000-square-foot office at 250 Park Avenue South between West 19th and West 20th Streets, after growing from three employees to 70 over the past two years, per Crain’s. The five-year-old, San Francisco-based firm plans to grow to 175 employees, and its new home can fit up to 200. The move to New York has also made it easier for Flexport to reach local shipping and trucking companies that do business at the Port Newark-Elizabeth Marine Terminal.

The 600-person company also has offices in Amsterdam, Atlanta, Los Angeles, Chicago, Hamburg, Hong Kong and Shenzhen. It offers shipping and customs services as well as real-time shipping data for air freight, ocean freight, and trucking.

Other tenants in the Chelsea property include meal delivery service Plated, legal news provider Law360 and wedding dress retailer Kleinfeld Bridal.

Source: commercial

Knotel Takes Full Floor at Beijing Shokai Group-Owned Chelsea Building

Office provider Knotel’s appetite for Manhattan commercial space continues unabated, with the startup having inked a 12,683-square-foot lease at 224 West 30th Street in Chelsea, Commercial Observer has learned.

Knotel signed a 10-year deal late last month for the entire fifth floor at the 14-story, roughly 143,000-square-foot building between Seventh and Eighth Avenues, according to sources with knowledge of the transaction.

Asking rent in the deal was $52 per square foot, sources said. James Caseley, John Brod and Alison Miller of ABS Partners Real Estate represented the landlord, a subsidiary of China-based real estate investment and development firm Beijing Capital Development Holding, also known as Beijing Shokai Group. Knotel was represented by Jessica Tu of CJ Net Inc. and Aziz Kabbaj of Mirador Real Estate.

While the lease commenced at the beginning of this month, Knotel expects to take occupancy of the space after completing a buildout of the offices. The company provides flexible, short-term office arrangements to mostly small- to mid-sized businesses—though it is increasingly serving larger corporations like Starbucks, which recently took a full floor at a Knotel location at 72 Madison Avenue in NoMad, as CO reported this month.

In a statement, Brod said Knotel’s buildout of its full-floor space will “reflect its brand.” He added that ABS has “been working closely with ownership to transform this building, which is presently comprised of fur showrooms, into a premiere office destination within the Penn Station/Hudson Yards corridor.”

A spokeswoman for Knotel confirmed the deal but did not immediately provide comment. Representatives for CJ Net and Mirador could not immediately be reached for comment.

Knotel has signed a flurry of office leases across New York City, and expanded into the San Francisco office market, since sealing a $25 million Series A funding round in February 2017. (Disclosure: Observer Capital, led by Observer Media Chairman and Publisher Joseph Meyer, is among Knotel’s investors).

The company claims it now has more than 700,000 square feet under lease across more than 40 locations in New York and San Francisco, expects to grow its total footprint to several million square feet before the end of the year and has plans for further expansion into global markets including London.

Source: commercial

Fogarty Finger Takes Ground-Floor Retail for Its Office

Architecture firm Fogarty Finger was running out of space in its Tribeca office, so it took the unusual step of leasing a retail space downstairs.

The 15-year-old firm inked a deal last week for 6,000 square feet of ground floor and basement retail in its current home at 69 Walker Street, between Broadway and Church Streets, where it has occupied 8,000 on the second floor for four years, company co-founder Robert Finger told Commercial Observer. It will use the new square footage as an part of its office. The lease will last for two years, with the right to extend.

No brokers were involved in the transaction. Representatives for the landlord, WalkBroadway Realty LLC, declined to comment.

Asking rent for the space was $70 to $80 a square foot, but “we landed on something more affordable,” Finger said.

The rest of the building is residential, and the firm would have had to move if it didn’t lease the first-floor space.

“Our work model is that we all sit in one studio,” he explained. “Our choice was to move, or consider the retail. We hadn’t thought about it because it was too expensive, but then we negotiated. The retail had sat vacant for so long.”

He suggested that more landlords should consider leasing their empty retail to office tenants. “Retail rents have come down, so it was actually affordable for us,” he said.

Fogarty Finger already has its own entrance, elevator and exterior signage in the property between Broadway and Church Street, which is also home to Chinese decor emporium Pearl River Mart. The 15-story, late 19th-century building was originally constructed as a commercial loft building, but it was converted to 64 residential condominium units in 1983. However, the first two floors remain commercial.

Source: commercial

Scotiabank Subleases From Hudson’s Bay at Brookfield Place

Toronto-based financial institution Scotiabank has subleased 50,000 square feet at Brookfield Place from Canadian retail conglomerate Hudson’s Bay Company.

Scotiabank, also known as the Bank of Nova Scotia, took a full floor from Hudson’s Bay at 250 Vesey Street, where it already occupies 100,000 square feet on the 23rd and 24th floors. The new floor wasn’t immediately clear, but the 186-year-old firm took the space that is contiguous with its current offices, according to The Real Deal, which first reported news of the lease.

Asking rent was $60 a square foot, TRD reported, but the length of the lease wasn’t available.

Hudson’s Bay and Scotia Bank didn’t immediately return requests for comment.

Scotia Bank first moved into 250 Vesey Street in 2013, after decamping from another Brookfield Property Partners-owned office tower, 1 Liberty Plaza.

Hudson’s Bay, which is the parent company of Lord & Taylor and Saks Fifth Avenue, signed on for 166,000 square feet at 250 Vesey and 233,000 at 225 Liberty Street in 2014. However, it has been quietly shopping four floors at 250 Vesey after announcing plans to lay off 2,000 employees, TRD noted.

Source: commercial

City Strikes Pricey Deal for Pre-K at Extell’s UES Condo Tower

The New York City School Construction Authority has leased the ground floor of Gary Barnett’s 30-story condominium building on the Upper East Side for a pre-kindergarten program, according to public records.

The agency, which develops and leases on behalf of the city’s Department of Education, inked a 15-year deal for 11,492 square feet at the base of The Kent, Extell Development Company’s 83-unit condo project at 200 East 95th Street at the corner of Third Avenue. The DOE will open a public pre-kindergarten in September in the Beyer Blinder Belle-designed building, according to a spokesman for the SCA.

Although it’s still under construction, the Kent is set to open at the end of 2018 and currently has apartments for sale ranging from a two-bedroom, two-bathroom unit asking $2.5 million to a five-bedroom, four-and-a-half-bath pad for $8.4 million.  

Howard Kesseler of Newmark Knight Frank represented the SCA in the transaction, and it’s unclear if Extell had a broker. Kesseler didn’t immediately respond to a request for comment. A spokeswoman for Extell did not respond with a comment.

The city will pay $1.97 million annually ($171 a square foot) for the first five years of the lease, per the memorandum of lease on file with the Department of Finance, $2.17 million ($188 a square foot) annually for the following five years, and $2.38 million ($207 a square foot) for the 10th through 15th years of the lease. Asking rents for educational and medical space in Manhattan averaged $47 a square foot in 2017, according to data from CBRE.

While the rent seems expensive, schools have few alternatives when it comes to leasing space in pricey areas of Manhattan and Brooklyn. Commercial Observer recently talked to private school administrators about the struggle to find affordable locations to rent or buy in Brooklyn, and the public school system faces similar financial pressures as it hunts for space to expand throughout the five boroughs.

David Lebenstein, who heads C&W’s not-for-profit advisory group and handles deals for the SCA in the outer boroughs, said the rent might be justified if there’s a usable basement in addition to the 11,492 square feet stated on the lease.

“My gut tells me that they got a usable basement with high ceilings and some light and that it’s probably really 22,000 square feet, so that’s how they can justify it,” Lebenstein said. “It’s priced like retail, there’s no two ways about it. We did deals [for the SCA] all over Queens and it’s $30 to $50 a square foot, and rents are similar are in Washington Heights and Harlem.”

He added, “There are not a lot of options. They had a pressing need in this district, and they were probably oversold on whatever pre-k they had and needed more school seats.”

The pre-k lease comes as Mayor Bill de Blasio is aggressively expanding the city’s public pre-kindergarten programs. When the mayor took office in 2014, he announced that he would offer free, full-day pre-k for every 4-year-old in New York City. Then in April 2017, he rolled out universal pre-k for 3-year-olds, which would serve an expected 62,000 children.

Source: commercial