The Real Deal New York

CBRE takes over leasing at quarter-vacant 335 Madison Avenue

December 23, 2009 04:37PM
By Adam Pincus


335 Madison Avenue and Edward Goldman, an executive vice president with CBRE

Fighting back after losing millions of square feet in leasing agency assignments in recent months, commercial services firm CB Richard Ellis picked up the assignment for the 1.1 million-square-foot 335 Madison Avenue, Edward Goldman, a company executive vice president, told The Real Deal.

The news comes two months after CBRE picked up the assignment for the 430,000-square-foot 101 Sixth Avenue in Hudson Square, but after losing the Empire State Building, 100 Church Street and others.

The new assignment is welcome news for the brokerage. Because of losses such as 100 Church Street, CBRE is agent for nearly 7 million fewer square feet in Manhattan since September. As of this week, it was leasing agent for buildings, covering 55.5 million square feet, down from 62.2 million square feet three months ago, according to data from research firm CoStar Group.

CBRE signed on earlier this month as leasing agent for the Milstein Properties Midtown building at Madison Avenue between 43rd and 44th streets, Goldman said. Before taking over, leasing had been handled by the Milstein in-house firm MB Real Estate.

“Every landlord tries it on their own. And sometimes they just need to reenergize their marketing effort and bring in an outside firm,” Goldman said.
He is part of the team handling leasing at the building, that includes Stephen Siegel, chairman of global brokerage, as well as first vice president Bruce Weinberg and Jonathan Fales, a vice president.

The building is currently about 26 percent vacant, with a total of 32 percent available, CoStar figures show.

Bank of America, which is the largest tenant in the building, leases about 190,000 square feet in the tower, once known as Bank of America Plaza, on a lease that runs to December 2013, data from CoStar indicates. Some brokers said they expected the bank to move out when the lease expires, but the bank declined to comment.

Goldman said rents would be in the “low to high $50s” per square foot in the building that has 38,000- to 40,000-square-foot floor plates.

The 29-story building has a large atrium providing more windowed offices than a standard building, but at the same time some brokers believed it would increase the unusable space, known as the loss factor, of the building.

Erik Schmall, a leasing broker and senior managing director at commercial real estate firm Studley, who was not involved in the leasing arrangement, said the down market in general is pushing landlords to turn over leasing assignments to outside firms.

“I think Milstein [Properties] is a very capable owner. But this is a trying market. They want professional agents that can make calls continuously,” Schmall said.

Calls to Milstein were not returned.

Included in the available space are two large blocks of space, for 95,000 square feet and for 150,000 square feet, Goldman said.

He was not dissuaded by the numerous amounts of competing large space parcels on the market.

He said his challenge was to convince tenants such as law and financial firms at other buildings not to sign a renewal, making the argument that often their current space on an expiring 10- or 15-year lease is old and often needs a makeover even if they stay. In addition, many firms are downsizing.

“You are always going to compete with the renewal,” he said.

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