IBM spinoff Kyndryl has signed a lease at SL Green Realty Corp.’s new One Vanderbilt skyscraper, choosing Midtown Manhattan for its global headquarters as the borough’s office market continues to struggle.
Following Kyndryl’s commitment to occupy 22,531 square feet over a nine-year term, the city’s second-tallest office building is now 81 percent leased. SL Green said in a statement that One Vanderbilt is on track to become 90 percent leased by the end of the year.
Opened last September, the $3.3 billion building rises 1,401 feet next to Grand Central Terminal and offers 1.7 million square feet of Class A office space. The tower spanning a full city block between 42nd and 43rd Streets, along Madison and Vanderbilt Avenues, has attracted a variety of tenants including TD Securities and TD Bank, The Carlyle Group, Oak Hill Advisors and McDermott Will & Emery.
SL Green, the largest office landlord in Manhattan, has recently completed its own headquarters move to the Kohn Pedersen Fox Associates-designed tower. The REIT recently announced its plan to open a 65,000-square-foot, immersive observatory in the building’s crown on October 21. All-glass elevators on the side of the building will transport visitors to the deck, which will feature glass sky boxes and an outdoor terrace bar.
Armonk, N.Y.-based IBM revealed last month that Kyndryl will be the name of the independent company formed after the separation of its Managed Infrastructure Services business, which is expected to complete by the end of 2021. Cushman & Wakefield’s Patrick Murphy, Winston Schromm and Will Yeatman represented Kyndryl in the lease transaction with SL Green, while a CBRE team of Robert Alexander, Ryan Alexander, Alex D’Amario and Emily Jones represented the landlord.
The lease at the trophy tower contrasts with a sluggish office market in Manhattan, which recorded its highest-ever availability rate of 16.5 percent in April, rising for the 11th consecutive month, according to data from Colliers International. The brokerage found that leasing activity in the borough fell 46 percent from March and was down 75 percent from the monthly average in 2019.