DDR Corp. has leased the entire 27th floor at 320 Park Ave.
Bryan Boisi and dad Mark Boisi of Cushman & Wakefield repped the shopping center giant in the lease for the 15,361-square-foot floor.
In an executive shake-up last year, DDR, a Beachwood, Ohio-based shopping center REIT, decided to retain its employees in Ohio but allow its new C-suite executive hires from Equity One — its chief executive, chief financial officer and chief operating officer — to remain in the city that never sleeps.
(When Florida-based Regency Centers merged with and took over Equity One, the trio became available to join DDR. )
David Kleiner, Betsy Buckley and Frank Doyle of JLL represented the building ownership, Mutual of America.
The asking rent at the building on the west side of Park between East 51st and 52nd streets is $98 per square foot in the tower and $78 per square foot in the base.
The insurance company purchased the then-empty 30-year-old building in 1992 from Olympia & York for $130 million, or roughly $200 per square foot.
That sale had been in limbo all that year because the incentive program for commercial properties — the Industrial and Commercial Incentive Program (ICIP) — had expired, but a new renovation program had been proposed.
Then-CEO of MoA William J. Flynn and his second-in-command, then-president and COO and current CEO Thomas Moran, were reluctant to commit to such a large undertaking and renovation at a time when few buildings were selling for so much money.
And there was certainly no guarantee they would be worth that much in the future.
Even with Manhattan in the depression doldrums, the Legislature and city administration hemmed and hawed about renewing the program or adding benefits, which included the new commercial renovation benefit for both lower Manhattan and Midtown.
The plan was finally approved in Albany in August 1992 and by the City Council in early September.
I called Moran at the time to give him the news, and he told me they could now proceed with the deal. Days later, Mutual of America signed the contract to buy the building for its headquarters and closed the deal on Oct. 15.
(The ICIP was to last through June 30, 1994, and in August, after expiring, it was extended retroactively and forward through Jan. 31, 1995.)
That exemption enabled MoA to make the then-extraordinary $73 million investment toward stripping it down to the concrete and steel and entirely rebuilding the 1961-era 35-story building into a 750,000- square-foot tower with an energy-efficient design by Swanke Hayden Connell, topped with a 52-foot-high gable that now proudly flies a flag.
At the time, an executive at the Real Estate Board of New York told me, “Mutual of America said the renovation benefits put them over the top. They could not have done that deal without them.”
In 1992, the property was assessed at $42.9 million. Throughout the exemption period it paid taxes, just a bit less than it would have otherwise. The entire exemption was gone by 2007-2008, when its taxable value was $115.83 million.
For 2018-2019, its taxable transition assessment was $173 million, and it will pay just over $80,000 to the Grand Central Partnership and another $18.1 million to the city for property taxes.
Flynn, MoA’s chairman emeritus, died on June 2, 2018, at the age of 91.
He was prescient and understood the value of Park Avenue real estate as well as the need to reinvent buildings to keep up with new technology and mechanical standards.
Today, as JPMorgan Chase plans its own entire rebuilding of 270 Park Ave. due to the East Midtown Rezoning that provides for air rights transfers and other incentives, we can look at 320 Park and remember that we can’t lock in our skyline or the most exciting city in the world will sleep.
