UPDATED, 5:37 p.m., May 23: In what is the largest sublease of the year so far, Morgan Stanley has inked a 148,421-square-foot deal at Vornado Realty Trust’s 1290 Avenue of the Americas, according to data from commercial real estate firm Cassidy Turley provided to The Real Deal.
The nation’s sixth-largest bank by assets subleased the entire 12th and 13th floors from life insurance company AXA Equitable, which has 443,599 square feet in the 44-story, 2 million-square-foot Midtown office tower, located between 51st and 52nd streets, according to CoStar Group. The length of the term is 11 years.
A Jones Lang LaSalle team led by Matthew Astrachan, Mitti Liebersohn and Paul Glickman brokered the deal. Morgan Stanley has been reportedly eyeing the space since at least the beginning of May, and an unidentified executive told the New York Post at the time that rents would be in the $40s per square foot. Representatives from Morgan Stanley, JLL and AXA did not immediately respond to requests for comment.
The deal is comfortably the year’s largest sublease transaction. Another AXA sublease deal at the building, in which Sirius Satellite took 86, 877 square feet on the entire 11th floor, was the second largest, the Cassidy Turley data show. French alcohol manufacturer Remy Cointreau also took 52,811 square feet from AXA on the 14th floor of the building.
Law firm Ropes & Gray — which has seven floors at Beacon Capital Partners’ 1211 Avenue of the Americas totaling over 277,000 square feet – subleased the 40th floor to law firm Zeichner Ellman & Krause, the data show.
The 10-year deal covered a 42,435-square-foot space and, according to data provider CompStak, rents for the sublease were in the low $50s per square foot, while Ropes’ current rent for the space is in the $60s.
“Sublease space continues to be in high demand in today’s value-driven market,” said Richard Persichetti, Cassidy Turley’s vice president of research, marketing and consulting , explaining that sublease tenants enjoy, on average, a 10 to 15 percent pricing discount compared to direct leases.
In April 2012, Morgan Stanley signed a nearly 1.2-million-square-foot renewal and expansion lease at Brookfield Office Properties’ 1 New York Plaza in Lower Manhattan that will keep them in the building through 2029.