The Real Deal New York

Pillsbury Winthrop negotiating 90K sf Midtown lease

Law firm in late-stage talks to take several floors at Paramount’s 31 West 52nd Street
By Rich Bockmann | March 23, 2018 07:00AM

Paramount Group’s Albert Behler and 31 West 52nd Street

International law firm Pillsbury Winthrop Shaw Pittman is nearing a deal to move its offices from Times Square further north in Midtown, where it’s negotiating a new lease for roughly 90,000 square feet.

The white-shoe law firm is in late-stage talks to lease the top four floors at Paramount Group’s 31 West 52nd Street between Fifth and Sixth avenues, sources told The Real Deal. The asking rent for the space is north of $90 per square foot.

Representatives for Paramount Group declined to comment. But CEO Albert Behler said on the company’s most recent earnings call in February that he was “laser focused” on leasing a large, contiguous block of nearly 170,000 square feet across the top seven floors of the building, along with another large block nearby at 1325 Sixth Avenue.

“The lobby renovation has begun and has been very well received as evidenced by our activity,” he explained.

The 29-story, 761,790-square-foot coral-granite tower was 78 percent leased as of the end of last year, according to Paramount’s financial disclosures. The law firm Clifford Chance occupies nearly 330,000 square feet on a lease running through 2024.

Pillsbury, meanwhile, now occupies a little more than 150,000 square feet at the former Bertelsmann Building at 1540 Broadway owned by a joint venture of EDGE Fund Advisors and HSBC Alternative Investments Limited, where the 15-year lease it inked in 2003 is expiring next year.

A spokesperson for Pillsbury declined to comment. Savills Studley’s David Goldstein and Mitchell Steir, who are negotiating on behalf of the law firm, could not be reached.

The deal would be something of a reunion for Paramount and Pillsbury.

Paramount Group was, at a time, the law firm’s landlord at 1540 Broadway, which it bought from media company Bertelsmann AG in 2004 for $426.5 million. Paramount in 2006 sold the retail portion of the building to Vornado Realty Trust and the office floors to Equity Office for a combined $820 million.

Paramount Group purchased 31 West 52nd Street in 2007 for $500 million with JPMorgan Investment Management, whose 35.8 percent stake it bought in 2015 for $230 million.

With 100 percent ownership of the tower, Paramount the following year refinanced the building with a $500 million loan from AXA Equitable Life Insurance Company through Quadrant Real Estate Advisors and the Metropolitan Life Insurance Company.

Pillsbury traces its roots in New York City to the Downtown law firm Winthrop, Stimson, Putnam & Roberts, which was founded in the Wall Street area in 1868 and merged with San Francisco-based Pillsbury in 2001. The company was in a three-way tie as the 93rd largest firm in New York in 2016 with 92 lawyers, according to the New York Law Journal’s most recent ranking.