SL Green Lands 113,000-SF Lease at Manhattan Office Building

March 4, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user goodrob13

Those big 100-plus-square-foot office leases that all but disappeared a year ago are slowly but surely beginning to pop up again. SL Green Realty Corp. has just signed a deal for the Metropolitan Transportation Authority (MTA) to occupy nearly 113,000 square feet in its 350,000-square-foot New York City office building at 333 West. 34th Street.

Located in Midtown Manhattan just a block from Penn Station, the 10-story tower at 333 West 34th Street was originally developed in 1954. SL Green acquired the building in 2007 for $183 million in a sale-leaseback transaction that committed Citigroup to full occupancy of the building through 2009. SL Green recently completed a $26 million capital improvement program that left the building with, among other freshly added amenities, 20,000 square feet of brand new retail space. MTA’s new digs will cover the 7th floor through the 10th floor, and will allow the company to relocate form the World Financial Center and expand elbow room for its Business Service Center.

“We’ve seen big tenants relocate to different locations, some because they’re either finding better value, or looking to upgrade or looking for cost savings, or doing consolidations,” Steven Durels, Executive Vice President and Director of Leasing and Real Property for SL Green, told CPE. “So there are a lot of factors driving these decisions. We think things are turning around; I think we’re at the bottom of the market and a lot of businesses are making judgments for the long-term, and that is driving them to make real estate decisions they weren’t making a year ago.”

What a difference a year makes. In early March, Citrin Cooperman & Co. signed a long-term renewal and expansion lease covering 75,000 square feet in Silverstein Partners’ office property at 529 Fifth Avenue, and Horizon Media Inc. signed a 115,000-square-foot, 15-year lease agreement with Trinity Real Estate at 1 Hudson Square last month. Also in February, at 333 W. 34th, The Segal Company committed to a 15-year lease for 156,000 square feet, which along with the MTA lease, leaves the building 81 percent occupied.

Financial terms of MTA’s lease have not been disclosed; however, SL Green is currently marketing space at 333 W. 34th for $42 per square-foot.