September 2011 Hedge Fund Index – More Sublease Opportunity Every six months, we update the New YorkCity hedge fund index. The index tracks 24 Class A and trophy buildings in Midtown Manhattan which have a high concentration of boutique hedge fund, investment management, and related financial service tenants. Even as discussion of a sustained market recovery is questioned, pricing among the top tier buildings has held steady. The high asking rent for direct space is above $100 per sq. ft. in all but one of these signature properties. $240 $220 $200 $180 $160 $150 $140 $120 $135 $125 $120 $105 $90 $215 Asking e t Rent $140 $120 $100 $80 $60 $40 $20 $0 $49 $145 $140 $110 $95 $60 $140 $135 $145 $135 $120 $145 $130 $115 $115 $110 $100 $115 $128 $95 $107 $135 $98 $65 $70 $66 $74 $59 $59 $40 $64 $81 $49 $52 9 West 57th Street 40 West 57th Street 1330 Avenue of the Americas 152 West 57th Street 65 East 55th Street 623 Fifth Avenue 640 Fifth Avenue 712 Fifth Avenue 745 Fifth Avenue 767 Fifth Avenue 510 Madison Avenue 520 Madison Avenue 540 Madison Avenue 590 Madison Avenue 650 Madison Avenue 660 Madison Avenue 667 Madison Avenue Low Asking Rent High Asking Rent Low Ask = Sublease 888 Seventh Avenue Hedge Fund Index 320 Park Avenue 350 Park Avenue 375 Park Avenue 390 Park Avenue 280 Park Avenue 450 Park Avenue September 2011 Hedge Fund Index - Low Asking Rent The "low asking rent” shown in grey averages $81.00 per sq. ft. This is a modest decrease from April 2011, when the low average was $82.00 per sq. ft. We have highlighted that the low rent in 14 of the buildings is for sublease space, which is often discounted due to factors such as shorter remaining term length, condition of the space itself, encumbrances, lack of landlord privity, and general risk often associated with sublandlord credit. This is a significant increase from six months ago. The number of sublease opportunities has more than doubled in the index buildings, and evidences a trend that reinforces sublease space opportunities will be more plentiful throughout the balance of 2011. While sublease space may enter the market for a variety of reasons, primarily it is due to tenants disposing of a portion of excess space, or closing their operations altogether. However, as shown in this month’s report, there are several spaces that are available as funds have outgrown their former locations. Most notably: Man Group leased nearly 50,000 sq. ft. in a relocation to 452 Fifth Avenue; the firm is giving up 10,000 sq. ft. at the Lever House / 390 Park Avenue CQS is in the market to double in size from its current 4,000-sf space at 152 West 57th Street Partners Group USA relocated to 30,000 sq. ft. at 1114 Avenue of the Americas; a significant increase from the firm’s prior 5,100 sq. ft. space at 450 Lexington Avenue Cerberus Capital leased 109,000 sq. ft. at 875 Third Avenue and placed its similar sized space on the market at 299 Park Avenue, most of which has a near-term lease expiration Hedge Fund Index - High Asking Rent The "high asking rent” shown in red increased in nearly every building on the survey, and now averages $128 per sq. ft. relatively flat from six months ago. Most notably, the “high” asking rent exceeds $100 per sq. ft. in all but one of the buildings with such available space. 9 West 57th Street remains the highestpriced building in New York, with a peak asking rent of $215 per sq. ft., followed by 280 Park Avenue at $150 per sq. ft. Following the announcement of new ownership through SL Green and Vornado, and a multi-million dollar renovation plan, 280 Park Avenue has seen the highest increase in asking rent on the index – a jump of nearly 43%. Following suit, 888 Seventh Avenue recently listed a tower floor unit at $145 per sq. ft., a 32% increase in the high asking rent from six months ago. 152 West 57th Street’s highest asking rent saw a similar increase of 33% to $107 per sq. ft. AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF 125 West 55th Street Between Sixth and Seventh Avenues Boston Properties Entire 9th Floor – 24,768 rsf Entire 10th Floor – 24,768 rsf Total: 49,536 rsf $62.00/rsf 5-10 years Macquarie Bank Recent high end installation with large open area. Supplemental a/c, back up generator capacity and furniture available. Interconnecting staircase; floors may be leased individually. 405 Lexington Avenue Between 42nd and 43rd Streets Tishman Speyer Entire 40th Floor – 10,735 rsf 527 Madison Avenue S/E/C East 54th Street Mitsui Fudosan America, Inc. Entire 14th Floor – 7,550 rsf Entire 15th Floor – 8,200 rsf Total: 15,750 rsf $62.00/rsf Through November 2013 Sanders Morris Harris Built with perimeter offices, conference room and large open trading area. Furniture may be available. Asking Rent Term Sublandlord Comments $60.00/rsf Through June 2017 Mesirow Financial Built with perimeter offices and conference room. Furniture available. Good light and views. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 152 West 57th Street Between Sixth and Seventh Avenues TF Cornerstone, Inc. Part 22 – 3,574 rsf $52.00/rsf Through November 2018 RHO Management Built with 5 windowed offices, conference room, pantry, and open area. Flexible term. 152 West 57th Street Between Sixth and Seventh Avenues TF Cornerstone, Inc. Part 32 – 1,915 rsf $80.00/rsf Through May 2015 TH Advisors Built with one conference room and windowed open area. Some furniture available. 152 West 57th Street Between Sixth and Seventh Avenues TF Cornerstone, Inc. Part 41 – 4,031 rsf $88.00/rsf Through June 2019 CQS Built with 3 conference rooms, 1 office and open area for 17 trading positions. Furniture available. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 152 West 57th Street Between Sixth and Seventh Avenues TF Cornerstone, Inc. Part 52 – 5,764 rsf $106.00/rsf Through December 2015 Fenway Partners Built with 6 offices, conference room and open area for 10 trading positions. Three ton supplemental a/c unit. Spectacular Central Park views. 152 West 57th Street Between Sixth and Seventh Avenues TF Cornerstone, Inc. Entire 40 – 10,799 rsf $95.00/rsf Through August 2020 Meridian Capital Built with perimeter offices, trading area, and 2 conference rooms. Executive restroom. 650 Fifth Avenue S/W/C West 52nd Street The Alavi Foundation Entire 9 – 10,799 rsf $45.00/rsf Through August 2013 ORE Hill Partners Built with 6-7 perimeter offices, 3 conference rooms, open trading area for 28 positions. Furniture and phones available. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 600 Madison Avenue S/W/C East 58th Street Ruben Companies Part 24 – 2,341 rsf and 3,655 rsf $76.00/rsf Through November 2013 Evercore Partners 2,341 rsf unit has three conference rooms and open area. 3,655 rsf has 4 offices, conference room and open area. 909 Third Avenue Between 54th and 55th Streets Vornado Part 32 – 8,490 rsf $55.00/rsf Through May 2019 Robeco Investment Management Built with 12 perimeter offices, 2 conference rooms and open area with 40 trading positions. 909 Third Avenue Between 54th and 55th Streets Vornado Part 28 – 5,139 rsf $47.00/rsf Through May 2019 Robeco Investment Management Built with 6 perimeter offices, 2 conference rooms and open area. Recently renovated corridor. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 450 Lexington Avenue Between 44th and 45th Streets Istithmar PJC Part 39 – 5,125 rsf $40.00/rsf Through June 2012 Partners Group USA Built with open area and 2 conference rooms. Furniture available. 598 Madison Avenue N/W/C East 57th Street 598 Madison Leasing Corp. Entire 11 – 5,620 rsf $85.00/rsf Through May 2015 Global Reach Capital Built with 11 offices, conference room and open area. Furniture available. 200 Park Avenue Between 44th and 45th Streets Tishman Speyer Part 32 – 11,412 rsf $75.00/rsf 3-10 years Korn Ferry Newly built space with 5 offices, conference room and large open area. Fully furnished. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 320 Park Avenue Between 50th and 51st Streets Mutual of America Part 14 – 10,700 rsf $65.00/rsf Through May 2020 JP Morgan Chase Built with 6-7 offices and large open area. Park Avenue frontage. 1114 Avenue of the Americas S/E/C West 43rd Street Brookfield Office Properties Part 37 – 6,821 rsf $74.00/rsf 3 years Partners Group USA Newly built trading installation with two conference rooms, reception and trading area. 55 East 52nd Street Between Park and Madison Avenues Fisher Brothers Management Co. Part 34 – 6,740 rsf $70.00/rsf 2-3 years Court Square Capital Built with 8 windowed offices and open area. Some furniture may be available. Private restroom, direct elevator presence. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF 299 Park Avenue Between 48th and 49th Streets Fisher Brothers Management Entire 14 – 27,782 rsf Entire 21-23 – 28,643 rsf each Total: 113,711 rsf $60.00/rsf Through January 2014, floors 21-23 Through April 2018, 14th floor Cerberus Capital Management Built with perimeter offices, trading and support areas. 14th floor is built with open area for 60 trading positions. 601 Lexington Avenue Between Third and Lexington Avenues Boston Properties Part 26 – 5,245 rsf to 6,509 rsf 540 Madison Avenue S/W/C East 55th Street Boston Properties Entire 38, 39 – 7,750 rsf total Asking Rent Term Sublandlord Comments $85.00/rsf 5-10 years *Direct Availability New prebuilt units under construction. Newly renovated corridor. High end finishes with large open area. Good light and views. $100.00/rsf Through October 2017 Vedanta Group Duplex floors; 17’ ceilings on the 38th floor; skylights on the 39th floor; large useable terrace. Furniture available. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 245 Park Avenue Between 46th and 47th Streets Brookfield Office Properties Part 17 – 20,500 rsf Entire 15 – 35,924 rsf $78.00/rsf Through October 2022 JP Morgan Chase Mostly open space with glass fronted offices and raised floor. Supplemental a/c available. 730 Fifth Avenue Between 56th and 57th Streets The Winter Organization Part 7 – 14,456 rsf $48.00/rsf Through March 2017 Banco Santander Built with 8 perimeter offices, 4 interior offices, conference room and open area. Furniture available. 1350 Avenue of the Americas S/E/C West 55th Street SL Green Realty Part 31 – 7,960 rsf $60.00/rsf Through May 2013 Ridgetop Capital Built with 2 conference rooms,1 office, large open trading area and private gym with shower. Likely direct deal. Floorplan AprilSeptember 2011 2011 Newly Available Sublease Spaces Building Photo Building and Address Ownership Floor / RSF Asking Rent Term Sublandlord Comments 390 Park Avenue Between 53rd and 54th Streets RFR Realty Entire 20 – 10,700 rsf $98.00/rsf Through September 2016 GLG Partners Built with 3 conference rooms, column free open area for 30 trading positions. Supplemental a/c in place. 140 East 45th Street Between Third and Lexington Avenue Boston Properties Part 16 – 10,023 rsf $36.00/rsf Through February 2013 Sterne Agee Leach Built trading installation with 10 offices, open area and 2 conference rooms. Furniture available. Floorplan Hedge fund in today’s changing market Recently Completed Transactions – Financial Service Firms Type Sublease New New Expansion New Renewal/Expansion Renewal Expansion New New New New New New Sublease September 2011 September 2011 Tenant PDT (Process Driven Trading) Man Group AEA Investors Bank of Montreal CIFC Deerfield Sawaya Segalas & Company DeMatteo Monness Williams Capital Management EMF Financial Products, LLC Altum Capital Management Charter Bridge Capital Management LP Hagen Investments Contour Asset Management Colchester Global Investors Farley Capital Address 1745 Broadway 452 Fifth Avenue 666 Fifth Avenue 3 Times Square 250 Park Avenue 888 Seventh Avenue 780 Third Avenue 650 Fifth Avenue 70 East 55th Street 681 Fifth Avenue 1350 Avenue of the Americas 17 State Street 99 Park Avenue 885 Third Avenue 800 Third Avenue Square Feet 55,550 49,179 37,909 31,966 29,212 18,840 10,075 6,368 5,835 5,770 3,676 3,500 3,216 3,148 2,710 For further information, please contact: Cynthia Wasserberger at 212.812.5816 or
[email protected]