RXR Realty, owner and operator of a host of trophy assets located predominantly in metropolitan New York, has landed two new health-care tenants to occupy a total of approximately 30,000 square feet at two of its Manhattan office towers, according to the Commercial Observer. Medical technology firm Tempus Labs and Essex Woodland Healthcare Partners, a private equity firm that invests in health-care companies, have found homes at the Helmsley Building and 75 Rockefeller Plaza, respectively.
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Tempus Labs signed a five-year lease for 22,700 square feet on the ninth floor of the Helmsley Building at 230 Park Ave. in Midtown, according to the Commercial Observer article. Originally developed in 1929, the iconic Beau Arts-style Helmsley Building totals nearly 1.4 million square feet. RXR has owned the 34-story high-rise since 2015, when it acquired the asset from a joint venture of Invesco and Monday Properties for $1.2 billion.
Also in Midtown, Essex committed to 7,500 square feet at 75 Rockefeller Plaza, a 627,000-square-foot property that first opened its doors in 1947. The firm inked a 10-year lease for accommodations on the 17th floor of the 32-story skyscraper, which emerged from a comprehensive redevelopment in 2016, four years after RXR had purchased a 99-year ground lease of the building.
RXR relied on Newmark Knight Frank and an in-house executive for representation on the transaction with Tempus, which tapped CBRE for representation, according to the Commercial Observer. In the deal with Essex, in-house executives and Cushman & Wakefield stood in for RXR, while NKF represented the tenant.
Ray of light in a dark climate
RXR’s securing of two new leases in the currently challenging economic environment is a coup for the company and the Manhattan office market, which recorded 2.9 million square feet of negative absorption in the first quarter of 2020, according to a JLL report. Commercial real estate industry experts use the 2008 recession as a guidepost for the office sector’s potential resiliency during the current downturn; however, there are marked disparities this time around. Today’s downturn has a unique source, the COVID-19 global health crisis, and in Manhattan, the office market itself looks quite different. “The composition of the office-using jobs in Manhattan diversified considerably in the past decade—the key differentiator of the recent growth cycle—anchored by strong gains in the tech, professional and business services, creative and health-care sectors,” according to the JLL report. The New York office market may benefit from its diverse tenant base, but looking ahead at the next few months, JLL noted that “leases that are not driven by upcoming lease expirations, namely opportunistic requirements and expansions, will likely pause.”