Seeking to fill up a war chest and recapitalize some properties, the Macklowes are starting to market a 90-percent stake in each of two very different office buildings.
Harry and Billy Macklowe have hired Steve Kohn, president of Cushman & Wakefield Sonnenblick Goldman, to offer non-operating interests in the buildings at 610 Broadway and 400 Madison Ave., according to real-estate sources.
The move would allow son Billy to buy out father Harry’s shares of the properties, which the younger Macklowe would continue to manage and lease. The Macklowes and Kohn did not respond to requests for comments.
The six-year-old 122,000 square-foot glass box at 610 Broadway was developed by the Macklowes on the entire north block front of Houston Street that runs east to Crosby Street.
In a deal that solidified the NoHo/SoHo area as a target for office users, it was primarily leased to athletic giant Adidas, which has both offices and a large store in the cool glass building.
A minor hiccup for some investors is that, according to public records, the property is held via a ground lease that ends in May 2063 but includes the right of first offer to buy the land.
The other 184,859 square-foot building at 400 Madison Ave. was a 1929-era structure redeveloped into a Class A property by Macklowe starting in 1998.
He cleverly gained control by first buying the $45.5 million mortgage and then prevailing in the prior owner’s bankruptcy proceeding. The entirely modernized property includes a full floor of conference rooms as an amenity for its mostly small financial services tenants.
The marketing process is just beginning and, with a dearth of offerings, both buildings could command pricing between $800 to $1,000 a foot from pension and sovereign wealth fund-type passive investors.
While both Macklowes are likely seeking other opportunities, the elder Macklowe is busy converting two Upper East Side luxury buildings to condos and wrestling the dreamy vacant Drake site into a tall, gorgeous tower.
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The hot Meatpacking District is getting two office tenants from elsewhere to complete the leasing at 414 W. 14th St. The Midtown law firm of Davis Shapiro has just leased the fifth floor of 6,885 square feet, which includes a private brick terrace with arched openings and spectacular views north into Chelsea. Laurence Briody of CBRE represented the law firm.
The financial firm, Capital Access Network, now locally in Scarsdale, has leased the entire third floor of 7,500 square feet, as an added location. Elizabeth Juviler of Rice & Associates represented the tenant in this transaction.
Brad Gerla and Matt Bergey of CBRE represented the Carlyle Group ownership, which had asking rents of $75 a foot.
“I wish I had more space. I keep getting calls from brokers, and there is no more quality space,” said Gerla of the Meatpacking area.
According to Cushman & Wakefield, at 5.9 percent, Midtown South has the USA’s lowest office-vacancy rate with just 22 Class A buildings.
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A former firehouse at 99 Wooster St. that has most recently been the Peter Blum Gallery is getting rented to Victorinox.
The three-story building has approximately 5,000 square feet along with another 2,000 square feet in a basement. It is one of the few area buildings that can legally include retail on all its floors.
It is directly opposite Tiffany’s new Wooster Street entrance, and asking rents on this block for ground-floor space run around $250 to $300 a foot.
Michael Glanzberg of Sinvin Real Estate, who is the retailer’s North American rep, represented both sides in this 15-year deal. “It is gorgeous and utterly unique,” said Glanzberg. “There is still a fireman’s pole going through the floorboards.”
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In the West Village, Saturdays Surf NYC has signed a 10-year lease for 700 square feet at 17 Perry St. The small shop at the junction of Waverly and Seventh Avenue that previously housed Doma Café was not on the market but had an asking rent of $14,000 a month, which works out to $240 a foot.
Saturdays Surf NYC, which dispenses coffee along with its surfing wares and unique crafts at its first location at 36 Crosby St., was represented in the new Perry Street deal by Anna Rhein of Zelnik & Co. The building owner was assisted by Rafe Evans of Walker Malloy & Co.
