FAO Schwarz has ended speculation by finally renewing its lease at Boston Properties’ General Motors building, the New York Post reported. There had been rumors that the Toys “R” Us-owned toy retailer might leave when its lease ended in 2012. Agent Bradley Mendelson of Cushman & Wakefield confirmed the extension.

In March it was reported that Boston Properties and FAO Schwarz had entered arbitration over the rent. Shortly after purchasing the 1.77 million-square-foot building, Boston Properties said FAO Schwarz was not the most financially viable tenant considering the under-market rent it currently pays.

Sources said Mendelson’s team quietly talked to other prospective users if Schwarz decided not to renew. [more]

Mortimer Zuckerman, founder and chairman of Boston Properties and owner of the New York Daily News, appeared on CNBC this afternoon to discuss the media business, the debt ceiling and the commercial real estate market. When CNBC noted the bifurcated nature of the market, which is seeing growth in the best markets, but rent declines in other large cities, Zuckerman said that the dichotomy does not concern him. “We’ve limited our own activities to Washington and New York, Boston and San Francisco and these are the best markets to be in,” he said. [more]

Financial firm Thiam Management inked a deal for nearly 6,000 square feet at 510 Madison Avenue, for a price in the $90s-per-square-foot range, Real Estate Weekly reported. The space represents one of two pre-built office units on the eighth floor of the 30-story, 350,000-square-foot property. The other eighth floor space was recently leased to a financial firm called Africa Global for about the same price. “The leasing on the eighth floor is supportive of the continued interest in the building,” said Paul Amrich, an executive vice president at CB Richard Ellis, who along with Kerry Powers, represents the building’s landlord, Boston Properties. Real Estate Weekly notes that the renewed interest shows the building has come along way since funding issues plagued 510 Madison when it was controlled by Macklowe Properties. [more]

Two Grand Central Tower, a 667,000-square-foot office building at 140 East 45th Street between Lexington and Third avenues, has hit the sales market and could bring in more than $370 million, the New York Post reported. The building is currently owned by Boston Properties, Goldman Sachs and Meraas Capital, which is controlled by Dubai’s ruler, Sheikh Mohammed bin Rashid. Darcy Stacom and Bill Shanahan of CB Richard Ellis have been hired to market the property. As The Real Deal previously reported, the 44-story tower was built in 1982 and later sold by developer Harry Macklowe to the team led by Boston Properties for $237 million and the assumption of $190 million in mortgage debt in 2008.

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Harry Macklowe’s Drake Hotel site at 440 Park Avenue may be the most valuable development site in New York City, according to a recent list compiled by the New York Observer. It is closely followed by David Levinson’s 425 Park Avenue and the World Trade Center site, in positions two and three respectively. 

The Observer’s list, made in honor of a slew of recent development following a slow start to the year, was compiled using data from Cassidy Turley, Co-Star and its own reporting. 

Bringing up the rear of the list in positions nine and 10 are Boston Properties and Related project 740 Eighth Avenue and a 100,000-square-foor glass tower at 450 West 14th Street, atop the High Line.  [more]

Mortimer Zuckerman, Mark Edelstein, 250 West 55th Street

[Updated May 25 at 11a.m.]

International law firm Morrison & Foerster has signed a 15-year lease to take 180,000 square feet, or seven floors, of space at 250 West 55th Street, Boston Properties’ planned $1.05 billion, one million-square-foot office building in Midtown, Boston Properties announced today. Construction on the 39-story building, designed by Skidmore, Owings & Merrill, began in late 2007, but was suspended as a result of the recession in 2009, after the completion of excavation and foundations. It is slated to resume in the fall of this year and be completed by 2014.

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Manhattan developers are banking on a rise in demand for modern office space. More than 25 million square feet of projects are currently under construction or slated to begin in the next nine years, according to Bloomberg News, marking the city’s biggest decade for office development since the 1980s.

Only 7.4 million square feet of office space was developed in the 1990s and around 18.5 million in the 2000s.

Companies such as Boston Properties and Vornado Realty Trust are in negotiations with potential tenants and may even proceed with construction without securing leases, Bloomberg said. The average office vacancy rate fell to 12.2 percent as of April 30, after peaking at 13.5 percent in March 2010, according to Cassidy Turley. [more]

Home builder Hovnanian Enterprises has agreed to pay $175 per square foot to Boston Properties in a five-year deal for the renewal of its lease at 767 Fifth Avenue, on the 46th floor of the General Motors building.

The arrangement seems strange, Crain’s said, given that Hovnanian has been suffering enormous losses of late; the company’s stock fell 28 percent in the last 12 months and it endured a fiscal first-quarter loss of $64 million, down from the previous year’s profit of $236 million. [more]

During the depths of the financial crisis, developers reconsidered and re-imagined their shelved projects, and now, construction is resuming on some of the city’s most anticipated towers, according to the New York Times. Brookfield Office Properties spent construction delays re-engineering a cheaper way to build a deck overlooking the rail yards as it prepares several towers for its 5.4-million-square-foot lot between Ninth and Dyer avenues and West 33rd and 31st streets. Pacolet Milliken Enterprises demolished an entire block along Sixth Avenue between 39th and 40th streets before the downturn, and has now completed the design for a 350,000-square-foot office building at the site. Comments

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Boston Properties said it agreed to sell Carnegie Center, a 2 million-square-foot office park in Princeton, N.J., to a joint venture between Normandy Real Estate Partners and the Landis Group for $468 million.

In January, Doug Linde, president of Boston Properties, said the company might sell most or all of the 16-building complex, as part of a group of suburban properties that it was thinking about selling.

“I talked to Carnegie Center and we’re recapitalizing to sell a significant portion or a full on the entire Carnegie Center asset base depending on what that pricing looks like,” Linde told analysts in the January call, according to a transcript from SeekingAlpha.com. “We’d like to try and retain management and development because we still control the land for another seven-plus years and that will kind of play out.”
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