By Carmel Melouney on August 04, 2013.
Gov. Andrew Cuomo and Empire State Development Corp. are getting a rent reduction on their office space at 633 Third Ave.
The governor's office has renewed its lease for two floors, or roughly 40,000 square feet, in the 40-story building at Third Avenue and East 41st Street, according to real-estate data firm CompStak. Empire State Development will also continue to rent five floors, or roughly 104,000 square feet, in the building. Both leases are for 10-year terms with square-foot rental rates in the low $60s.
Before the lease renewals, the tenants were paying rents of roughly $85 a square foot. The new rates illustrate a push by the Cuomo administration to reduce real-estate costs. Both tenants said the new lease terms would save millions of dollars.
Landlord Time Equities last year explored selling the office condominiums on the top 10 floors of the building because it wasn't sure both tenants were staying after their leases expired in 2013, says Francis Greenburger, Time Equities chairman and chief executive.
Indeed, according to documents from an April board meeting, the state's Office of General Services conducted a search on behalf of Empire State Development for office space in the Grand Central Terminal area, but the decision was made to pursue a lease renewal.
Mr. Greenburger says Time Equities lowered rents as an incentive for both tenants to stay. "We liked having them as [tenants] and wanted to keep them," he says.
Bridge Financing to Assist Fulton Street Development
Plans for a $280 million luxury development in the Financial District near the new Fulton Center transportation hub have just received a cash injection.
Lightstone Group, a large closely held real-estate company, has just closed on a $43 million construction loan with Banco Inbursa SA for its Fulton Street project. The loan has a one-year term with two one-year extensions.
"This loan right now is an interim bridge loan until we start construction, then we'll get more construction financing," said Mitchell Hochberg, Lightstone's president.
The company has spent $76 million purchasing buildings and air rights so it can build a 58-story, 422,000-square-foot property on the south side of Fulton Street between Nassau and Dutch streets.
"We had the ability to aggregate and we thought it would be a very unique development."
This package includes 112 Fulton, 114 Fulton, 116 Fulton, 118 Fulton and 120 Fulton, and air rights to 41 John St., 43 John, 80 Nassau St., 86 Nassau, 88 Nassau, 15 Dutch St. and 122 Fulton.
Mr. Hochberg said Lightstone closed on the majority of the property in December, with the remainder closing on June 13.
"We're big believers in the renaissance and the future of the Financial District with the completion on 1 World Trade Center and Condé Nast moving downtown, and the Fulton Street transit hub," said Mr. Hochberg. "It was very appealing to us. We were very focused on the Financial District, and we thought it was underserved by luxury residential."
Demolition of the existing buildings is expected to start in October, with construction commencing in February. Mr. Hochberg said construction would take two years.
When complete, the development will feature 475 luxury residential units with amenities including a 24-hour doorman, rooftop terrace and full fitness center.
It will also have two floors of retail space with 18-foot finished ceiling heights totaling nearly 20,000 square feet.
In terms of retail tenants, Mr. Hochberg said Lightstone is talking to a number of companies, including both boutiques and chains.
"We want them to fit with the apartments. Hopefully the retail and residential tenants will move in simultaneously," Mr. Hochberg said.