SL Green Inks 217 KSF in Manhattan Office Leases

Amid the New York City market’s slow recovery, the REIT signed two expansions and one brand-new deal.

One Vanderbilt. Image courtesy of SL Green Realty Corp.

SL Green Realty Corp. continues to reel in lease agreements across its Manhattan portfolio, having just signed three separate deals at 919 Third Ave. and One Vanderbilt Ave. totaling 217,300 square feet.

In the largest of the transactions. SL Green closed an approximately 191,200-square-foot lease expansion with tenant Bloomberg LP at 919 Third Ave, a 1.5 million-square-foot Midtown Manhattan tower that SL Green co-owns with New York State Teacher’s Retirement System. The expansion, which encompasses space from the 28th through the 33rd floor of the 47-story Skidmore, Owings & Merrill-designed high-rise, gives the media and financial company a total footprint of approximately 748,400 square feet following a previous expansion of nearly 205,000 square feet in 2016.

READ ALSO: Beware of Hidden Issues in Commercial Leases: Part II

At One Vanderbilt, the roughly 1.7 million-square-foot tower that SL Green developed with Hines and the National Pension Service of Korea in 2020, the REIT inked two lease transactions.

919 Third Ave., Manhattan
919 Third Ave. Image courtesy of SL Green Realty Corp.

Private equity firm Flexpoint Ford signed a new lease to occupy just over 19,500 square feet on the 61st floor of the 77-story supertall Midtown skyscraper. Additionally, Stone Point Capital LLC increased its occupancy at the Kohn Pedersen Fox Associates-designed property, inking an expansion lease of nearly 6,600 square feet on the 50th floor. With the Flexpoint Ford and Stone Point transactions, One Vanderbilt, which recently landed refinancing to the tune of $3 billion, is now 92.7 percent leased.

SL Green relied on the CBRE team of Robert Alexander, Ryan Alexander, Emily Chabrier and Alex D’Amario for representation in the new lease transactions. CBRE’s Craig Reicher and Howard Fiddle represented Bloomberg, and John Maher and Hugh MacDonald of CBRE stood in for Stone Point Capital, while Newmark’s Jared Horowitz provided representation for Flexpoint Ford.

Pandemic-resistant portfolio

If the Manhattan office market is struggling in the pandemic-recovery era—and it is—then SL Green appears to be immune to the challenges. Absorption remains negative across Manhattan; however, improvement is at hand, as in the third quarter, the availability rate decreased for the second month despite the addition of seven large blocks of at least 100,000 square feet each to the market, according to a report by Newmark.

The third quarter proved quite a bit rosier for SL Green. The REIT’s Manhattan office portfolio recorded an occupancy level of 93.1 percent for the quarter, according to the company’s earnings report.

“A lot of the leasing is being driven by either financial service businesses in particular…it was 40 percent of our current pipeline, and TAMI, which is about 28 percent of our current pipeline. And a lot of the activity seems to be focused on the better-quality buildings,” Steven Durels, executive vice president & director of Leasing & Real Property with SL Green Realty Corp., said during the company’s third quarter earnings call on October 21, 2021.

“Thankfully in our portfolio, the majority of our buildings have enjoyed significant capital investment over the years, as we continue to develop them as healthy workplace environments, and that’s paying off for us and helping us increase our leasing velocity.”

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