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Category ArchiveParamount Group

Bandier Inks 28K-SF Lease at 0 Bond Street in Noho

Women’s activewear retailer Bandier has reportedly signed a 27,500-square-foot lease for a flagship retail location and offices at Paramount Group’s 0 Bond Street in Noho.

The company has agreed to take several floors at the five-story, 77,500-square-foot building at the northeast corner of Broadway, The Real Deal reported on Tuesday. Bandier will occupy 4,500 square feet of ground-floor retail space and 10,000 square feet of lower-level basement space, as well as 13,000 square feet on the fourth floor that will house offices and the brand’s Studio B fitness studio.

Asking rent at the property, also known as 670-674 Broadway, was $300 per square foot for the ground-floor retail space and $110 per square foot for the fourth-floor office space, according to TRD. The length of the lease was not disclosed.

Brandon Charnas and Adam Henick of Warwick Capital Management represented Bandier in the transaction, while landlord Paramount Group’s representation was not immediately clear. Representatives for both Paramount and Warwick declined to comment.

Bandier currently has retail stores at 164 Fifth Avenue in the Flatiron District and 150 East 72nd Street on the Upper East Side, as well as Long Island locations in Southampton and Manhasset and a store in Dallas, Texas.

The company will share 0 Bond Street with another fitness-oriented brand—luxury gym (and Related Companies subsidiary) Equinox Fitness, which took 29,000 square feet across multiple floors at the building in 2016.

Source: commercial

Paramount Promotes Leasing Exec to Ted Koltis’ Role, Seals 100,000-SF Office Deal

Paramount Group has promoted leasing executive Peter Brindley from senior vice president to executive vice president of leasing, a role formerly held by Ted Koltis. The news comes a day after the company announced it hammered out an agreement to bring open-source software database company MongoDB to its 48-story office tower at 1633 Broadway.

Brindley joined Paramount in 2010 and has quickly risen through the ranks of the office management company’s leasing division. In his new role, he will continue to manage the leasing of the company’s entire portfolio of commercial properties across New York City, Washington, D.C., and San Francisco. He replaces Koltis, who is leaving the company after six years “to pursue other opportunities,” according to a release from Paramount. A spokesman for Paramount didn’t respond to inquiries to talk to Brindley and Koltis, and neither broker responded to a request for comment.

Before arriving at Paramount, Brindley was a senior director at Tishman Speyer, where he handled the leasing of Rockefeller Center, the MetLife Building and 666 Fifth Avenue. (Tishman Realty and Construction developed 666 Fifth in 1957 and, as the company dissolved in 1976, it sold the 41-story building to Japanese developer Sunitomo for $80 million. The re-formed Tishman Speyer Properties then acquired the trophy office property for $518 million in 2000. In 2007, it sold the property to Kushner Companies for a then-record-breaking $1.8 billion.) Before heading to Tishman in 2004, he worked in the brokerage services group at CBRE.

“Peter is an extremely skilled leader and has formed significant and valuable relationships in his more than 15 years of experience in real estate,” said Paramount CEO and President Albert Behler in prepared remarks.

He added that Brindley “has done a remarkable job leasing Paramount’s 9 million square foot Class A portfolio in New York. We look forward to Peter leading our leasing team as we continue to execute our strategy to unlock value for our shareholders.”

1633 broadway Paramount Promotes Leasing Exec to Ted Koltis’ Role, Seals 100,000 SF Office Deal
1633 Broadway. Photo: CoStar Group

Meanwhile, Paramount finalized a 106,230-square-foot lease with MongoDB at 1633 Broadway, its 48-story skyscraper between West 50th and West 51st Streets. The landlord announced the 12-year deal in a press release this morning. The software company will take the 37th and 38th floors of the 48-story tower, as The Real Deal first reported last month.

MongoDB will relocate from the former New York Times Building at 229 West 43rd Street, where it has grown out of the 60,000 square feet it has occupied since 2013.

A CBRE team of Paul Amrich, Howard Fiddle, Stephen Siegel, Patrice Hayden Meagher, Emily Jones and Robert Hill handle leasing at the building, which was constructed in 1967 and designed by Emery Roth & Sons. Cushman & Wakefield’s Dirk Hrobsky, Chris Helgesen, Peter Trivelas and Gary Ceder represented MondoDB. Neither brokerage immediately responded to requests for comment via spokespeople.

Source: commercial

What’s Happening With Chinese Investment in New York City Commercial Real Estate?

There was a lot of nail-biting from the New York real estate community heading into this year after hearing that the biggest whale in terms of investment might not be allowed to swim in our waters. We’re talking, of course, about China.

With China’s capital controls in place, the country was expected to tamp down outbound investment in 2017. While the number of New York City investment sales deals involving the country has dwindled significantly this year, China still represents the biggest cross-border player, according to Cushman & Wakefield.

Chinese investments dropped to 16 percent, or six, of the 38 foreign capital deals (excluding debt deals) in New York City in the first three quarters of the year, versus 28 percent, or 16, of 58 acquisitions at the same time last year, C&W data indicates.

Francis Greenburger, the chairman and chief executive officer of Time Equities, explained the issue in Commercial Observer’s survey for this year’s Owners Magazine: “Although there are exceptions, Chinese investors are subject to government restraints in arranging to transfer funds out of China. This has caused a reduction in transactions by one of the most active group of New York City buyers.”

But in terms of dollar volume the dip in Chinese investment in New York City hasn’t been dramatic, and the country still has spent more than its competitors. Chinese investments made up 11 percent of the $24.51 billion spent on commercial real estate in New York City this year through September compared with last year’s 13 percent of $45.87 billion.

Despite a slowdown in deal flow and a reduction in investment sums, the Chinese have been going for big deals in New York City.

“Starting in 2016 through the first half of 2017, China surpassed Canada as the largest foreign investor in New York City,” said investment sales broker Douglas Harmon of C&W. “Capital controls caused Chinese buyers to participate in less transactions, but the capital was consolidated into the larger deals.”

Harmon and colleague Adam Spies are representing SL Green Realty Corp. in the sale of a 49 percent stake in a 54-story office tower at 1515 Broadway between West 44th and West 45th Streets to China Investment Corporation (CIC), a Chinese sovereign wealth fund. It is a property valued at $2 billion. A spokesman for SL Green said the deal has not closed.

In the priciest foreign property acquisition of the 12 months ending in October, Chinese conglomerate HNA Group paid $2.21 billion for 245 Park Avenue between East 46th and East 47th Streets. The sellers were Canada-based Brookfield Property Partners and the New York State Teachers’ Retirement System. The deal represents one of the highest prices ever paid for a Manhattan office property. (HNA also bought a mansion at 19-21 East 64th Street for $79.5 million this year.)

At the end of last year, CIC bought a 45 percent interest in the former McGraw-Hill Building at 1221 Avenue of the Americas between West 48th and West 49th Streets from Canada Pension Plan Investment Board. The property was valued at $2.29 billion.

Two other large Chinese acquisitions in the last year include WanXin Media’s $68 million buy of an office building and vacant lot at 7-15 West 44th Street and office developer Soho China picking up the landmarked John Pierce Residence at 11 East 51st Street for $30 million.

Alex Foshay, a senior managing director in Newmark Knight Frank’s capital markets division, said the Chinese government’s restrictions have “really strangled all major investment out of mainland China.”

Foshay cited as an example, China’s Anbang Insurance Group’s pulling out of an investment in 666 Fifth Avenue. Kushner Companies was planning to redevelop its flagship New York office tower with Anbang but talks terminated in March.

Terrence Oved, the head of the real estate department and a partner in the law firm Oved & Oved, said he has seen the drop off in acquisitions generally, and those that are closing are taking longer to complete.

“That rapid-fire tennis-match-like quality that we saw in 2016 [between players] is glaringly absent in the foreign transactions in 2017,” Oved said. “The perception of foreign money is that New York is in the later stage of the cycle.”

Also, Oved said, New York City is facing global competition from other world cities that weren’t as competitive the last few years. He pointed to Silicon Valley’s appeal to the tech company likes of Amazon, Facebook and Microsoft.

HFF’s Andrew Scandalios said that deal flow is down this year because properties are overpriced.

“Buyers are less enthusiastic to pay 2015 prices, and the sellers aren’t going to move [them],” he said. “We haven’t seen the offshore capital abate. It’s just they’re waiting for better pricing opportunities.”

Scandalios worked on the deal in which Singaporean sovereign wealth fund GIC picked up a 95 percent stake in the 50-story office tower at 60 Wall Street from Paramount Group and Morgan Stanley with a $1.1 billion valuation. (He also helped secure GIC’s $550 million acquisition loan from German bank Aareal Capital.)

In the summer, Germany-headquartered Allianz SE contributed the 18-story, 352,000-square-foot office building at 114 Fifth Avenue (which it acquired in 2015 with L&L Holding Company) into a then-new joint venture with Columbia Property Trust to buy and manage U.S. trophy properties. Columbia contributed a Palo Alto and San Francisco property to the venture. The three properties were valued at $1.3 billion and HFF negotiated the deal.

Commercial real estate deal volume is down this year for all foreign buyers in New York City as of the third quarter to 28 percent of all investment sales, C&W found, from 34 percent a year prior. (A look at foreign investment in New York City is limited to investment sales deals because debt and equity transactions are harder to track.) The findings parallel the nationwide trend. As of mid-2017, foreign investors represented 13 percent of all U.S. transactions by volume versus 16 at the same point in 2016, Real Capital Analytics data indicate.

Foshay said that a number of overseas buyers are “skeptical” about plunking down large sums of money (over $150 million) in the U.S., out of concern about “where we are in the cycle.”

This doesn’t mean, of course, that foreign investors aren’t seeking out deals nationwide. And Canada heads the procession.

Canada has sealed 255 U.S. commercial real estate acquisitions in the last year, followed relatively closely by China with 215 before dropping off significantly with Singapore and its 36 deals, RCA data show.

In the last year, Canadian entities have closed some notable purchases in New York City. Oxford contributed $65 million in a $130 million deal for 427 10th Avenue and Brookfield Property Partners input $185 million of $370 million for 1100 Avenue of the Americas. In addition, Canadian pension fund Ivanhoé Cambridge and Chicago-based Callahan Capital Properties paid $652 million for Goldman Sachs’ former headquarters at 85 Broad Street (Ivanhoé Cambridge invested $326 million in the deal).

Finally, Canada-based Oxford Properties Group is in the process of purchasing the St. John’s Terminal site at 550 Washington Street from Westbrook Partners and Atlas Capital for $700 million.

In New York City specifically, foreign investment has been dropping because of a dearth of trophy property on the market, according to a couple of brokers.

“There just wasn’t as much property available this year as there was last year,” said CBRE’s William Shanahan, who along with CBRE’s Darcy Stacom brokered the 245 Park Avenue deal.

The duo also sold the 31-story office building at 685 Third Avenue for TH Real Estate and Australian sovereign wealth fund the Future Fund, to Japanese real estate firm Unizo Holdings for $467.5 million.

Foshay concurred about the lack of inventory.

“I would say there has been a lack of trophy product to be purchased,” he said, but “there’s been quite a lot of availability in investment sales of non-trophy assets, meaning Class B product, and it is that trophy investment product that particularly appeals to overseas investors.”

Going forward, Shanahan expects to see “more participation” from Japanese investors.

Harmon said, “We think Chinese investment should pick back up in the first quarter of 2018. Additionally, South Korea, Japan, Norway, Saudi Arabia and Canada make for plenty of competition for domestic investors in 2018.”

Source: commercial

Wealth Management Firm for Blackstone Co-Founder Moves Within Midtown

Peterson Management, which manages the family assets of Peter Peterson, Blackstone Group co-founder and former Lehman Brothers chief executive officer, is heading to the former Citigroup headquarters on Park Avenue.

The firm will relocate from 26,000 square feet at Paramount Group’s 712 Fifth Avenue to 40,000 square feet of offices at Boston Properties399 Park Avenue, The Real Deal reported. The outfit led by Peterson’s son, Michael Peterson, will set up shop in a penthouse-like space that includes outdoor terraces and a glass box constructed on top of the building’s setback. Rents in the 15-year lease start at $130 a square foot and rise to $150 a square foot towards the end of the term, according to TRD.

Seth Hecht of Cushman & Wakefield and Joseph Conwell of Philadelphia-based GPX Realty Partners represented Peterson. (GPX Realty is a subsidiary of private investment firm GPX Enterprises, another company headed by Michael Peterson.) It wasn’t immediately clear who represented the landlord.

A spokesman for C&W declined to comment, and Boston Properties’ spokeswoman didn’t respond to a request for comment.

The wealth management company will relocate along with the nonprofit Peterson Foundation, which Peter Peterson launched in 2008 to focus on fiscal sustainability and national debt.

Source: commercial

A Slimmed Down Clinton Foundation Heading to 1633 Broadway

The Clinton Foundation is moving its offices from 1271 Avenue of the Americas to 1633 Broadway, Commercial Observer has learned, months after the shutdown of the foundation’s Clinton Global Initiative.

“Our lease is up at the end of the year, and as part of major renovations to our current building, all tenants have been asked to vacate,” a foundation spokesman said.

According to sources with knowledge of the deal, the 20-year-old charity took 36,393 square feet, or the entire fifth floor, via a sublease from ad delivery firm Extreme Reach at 1633 Broadway. The deal is for 11 years, with an asking rent of $58 per square foot.

Extreme Reach occupies the fifth and sixth floors of Paramount Group’s 48-story, 2.6-million-square-foot building between West 50th and West 51st Streets, and will consolidate onto the sixth floor.

Another tenants in the building includes law firm Arent Fox, which inked a deal for 76,000 square feet in August. Other tenants include Allianz Global, Morgan Stanley and Warner Music Group.

The Clinton Foundation is relocating from the 42nd floor at 1271 Avenue of the Americas between West 50th and West 51st Streets as the building undergoes a $325 million renovation, as The Wall Street Journal previously reported. CoStar Group indicates the foundation’s office there is 30,044 square feet.

Former President Bill Clinton created the foundation in 2001 as a way to fund his presidential library, The New York Times reported. Created in 20015, the Clinton Global Initiative served as a networking platform for The Clinton Foundation. In January, a Worker Adjustment and Retraining Notification Act (WARN) notice filed with the New York State Department of Labor indicated that 22 people would be losing their jobs due to the discontinuation of the Clinton Global Initiative, as Observer previously reported. The layoffs were to be effective as of April 15, according to the WARN notice, but a New York Times article dated Feb. 2 indicates the shutdown had been completed by that point.

The foundation spokesman assured: “The Clinton Foundation’s work has continued strong in 2017.”

CBRE’s Keith Caggiano and Roshan Shah represented the foundation in the deal and Mark Weiss and Seth Hecht of Cushman & Wakefield worked on behalf of Extreme Reach. CBRE’s spokeswoman declined to comment and a spokesman for C&W didn’t immediately respond to an inquiry.

Source: commercial

Law Firm Arent Fox Takes 76K SF in Move Within Midtown West

Arent Fox has inked a deal for 76,000 square feet at the Paramount Group’s 1301 Avenue of the Americas.

The 350-person law firm will take over the entire 41st and 42nd floors and half of the 38th floor in the tower between West 52nd and West 53rd Streets, The New York Post reported. The lease was signed today, and the attorneys are expected to move into the 46-story building in January 2018, according to CoStar Group.

The lease will last for 15 years, and asking rent in the transaction was $100 a square foot, sources told Commercial Observer.

The firm will relocate from 1675 Broadway, which is a block and a half to the west between West 52nd and West 53rd Streets.

Howard Grufferman and Cynthia Foster of Colliers International represented the law firm in the transaction, and JLL’s Frank Doyle, David Kleiner, Clark Finney and Harlan Webster represented Paramount. Neither brokerage’s spokesperson responded to a request for comment.

The building’s big floor plates and recently updated infrastructure have attracted a number of sizable corporate tenants in the past two years. Reinsurance giant Swiss Re moved into 68,000 square feet of offices at the Skidmore, Owings & Merrill-designed property earlier this year, Commercial Observer previously reported. Key Bank also took 73,000 square feet there in 2015.

And Paramount has drawn a handful of other legal tenants to the 1.8-million-square-foot commercial property. Law firms Susman Godfrey and Norton Rose Fulbright moved into the building two years ago.

Source: commercial

Paramount To Take 2 Herald Square–Unless Alpha Equity Comes Up With $5M Soon

Source: commercial

Italian Artisan Bakery Backed by Starbucks Coming to 1633 Bway

Princi, a boutique bakery and café out of Milan, Italy, will be coming to Paramount Group’s 1633 Broadway, according to executives on the property owner’s first-quarter earnings call this morning.

Company Chief Executive Officer Albert Behler said that Princi’s location at 1633 Broadway between West 50th and West 51st Streets will be one of the eatery’s first U.S. locations. Behler noted Princi’s partnership with Starbucks Coffee. (The coffee giant last summer announced that it was a global licensee and investor in the artisanal baked goods company.)

Ted Koltis, the executive vice president of leasing at Paramoun, said that Princi is a “high-quality tenant” and will occupy the space adjacent to the lobby entrance that was previously leased to Cosi. Koltis described Princi, founded by Rocco Princi in 1986, as “well-operated” and “well-financed,” and noted that it will serve as a “terrific amenity.”

Koltis further noted that the deal was “a good example of our stated retail strategy, a selective approach in deciding who we put at the front of our buildings.”

Last summer, Starbucks joined a global investment team to expand [the] footprint of standalone boutique bakery and café into international markets, including investment in London store.

Last June, Starbucks announced that it joined the global investment team for Princi, which “will focus on expanding the number of standalone Princi locations worldwide as well as making Princi the exclusive food purveyor at the new Starbucks Reserve Roastery and Tasting Rooms in Shanghai and New York,” according to a press release from Starbucks at the time. The New York Roastery is slated to open in 2018.

“We have never baked in our stores in 45 years,” Howard Schultz, Starbucks’ then chairman and CEO, in last June’s press release. “But all of that will change with the creation of this unique partnership.”

Further details were not immediately available as Paramount declined to comment further, and no one from Princi immediately responded to a request for comment.

Source: commercial