2014: A Year of Renewals, Part 3 of 6 - howprop.com websites

2014: A Year of Renewals, Part 3 of 6

22 Jan2015

2014: A Year of Renewals, Part 3 of 6

A fairly quiet CBD

By Howard Greenberg, President of Howard Properties, LLC

A couple of bright spots in the WP Central Business District (CBD) include increased leasing activity at the Ritz-Carlton office space (luxury women’s wear shop Mary Jane Denzer leased the prominent retail space this year), and continued subleasing success by Alliance Bernstein at 1 No. Lexington Ave. Argus Information and Advisory Services (a company that provides analytics, information and solutions to consumer banks and their regulators) is reportedly taking an additional 33,000 SF of the Alliance Bernstein space, after doubling its size to 50,000 SF when it relocated into that space a few years ago). Fortistar Capital renewed and expanded to 18,266 SF in direct space at 1 No. Lexington. Westchester Bank is establishing its new headquarters at 12 Water St. in about 11,000 SF. It will occupy 25% of the building and will have exterior signage rights.

But activity in the CBD in general has been quiet this year. Large CBD sublease spaces continue to languish, including the 42,000 SF Pearson Education sublet at 10 Bank St. and the 44,000 Arcadis sublet at 44 South Broadway.

Mack-Cali has invested money in its CBD properties for exterior upgrades to 1 Water St. and 1 Barker Ave., as well as lobby upgrades at 50 Main St. and demolition of vacant spaces.

John Barnes of Reckson/S.L. Green tells me they had strong activity in their CBD buildings. Soon, they hope to be over 90% leased at the Ritz-Carlton office space, and they have done well at 360 Hamilton Ave., where they did an approximately 20,000 SF renewal/expansion with Arch Capital Services, and 140 Grand St. is now in the mid 90’s occupancy. He tells me they did very well in small deals and small-deal renewals portfolio wide.

Route 119 deals

In the largest investment sale of 2014, Mack-Cali has sold its entire Rt. 119 office portfolio (consisting of 200 and 220 White Plains Rd. and 555, 565, and 570 Taxter Rd.) to Keystone Property Group. This reduces the firm’s office portfolio by about 600,000 SF. Mack-Cali has been hired to do the leasing, space planning, construction and legal work for the new owner. With the shrinkage of its footprint, its remaining Mack-Cali Westchester portfolio is now over 90% occupied, with particularly strong activity this year in its flex and industrial space. Their office space in Yonkers is 100% full, with a 19,000 SF renewal with Progressive Insurance this year.

Greg Frisoli of Newmark Grubb Knight Frank is leasing agent for RXR’s portfolio on the 119 corridor in the West submarket. He tells me they had a pretty good year, primarily with internal renewals and expansions. The flagship deal was a 15,000 SF expansion by Prestige Brands at 660 White Plains Rd., bringing it to a total of about 58,000 SF. Greg feels there is interest by larger tenants in keeping most or all of their employees on one floor-not an easy feat in our market when you get over 25,000 SF.

RXR finally lost Bayer Pharmaceuticals, which occupied most of 555 White Plains Rd., after an announcement about three years ago that it would consolidate its operations in New Jersey. The building will need significant refurbishment, but it is one of only a few buildings on the West Side that has a large block of space available, so it will get inspected by those companies who want the location and will have few, if any, other places to go.

Reckson’s 1st Niagara Bank lease at 520 White Plains Rd. in Tarrytown was one of the largest deals of the year, and one of the few that represented fresh absorption to the market.

To Be Continued…

Howard Properties, Ltd., which is headquartered in White Plains, NY, specializes in tenant representation and real estate consulting. Founded by veteran commercial broker Howard Greenberg in 1998, Howard Properties has completed space acquisitions, dispositions, lease renegotiations and consulting assignments in 20 states.