Here’s what tenants are paying at Brookfield & Swig’s Grace Building

Bank of America, the Trade Desk and Bain & Company among top tenants at 1.56M-sf tower

New York Insights /
Nov.November 20, 2020 02:52 PM
The Grace Building at 1114 Sixth Avenue (Photo via Wikipedia Commons)

The Grace Building at 1114 Sixth Avenue (Photo via Wikipedia Commons)

Developed by San Francisco-based Swig Company in 1974, the Grace Building, which overlooks Bryant Park, is easily recognizable by its sloping facades.

The 48-story office tower, located at 1114 Sixth Avenue, experienced significant turnover in its rent roll a few years ago when several of its largest tenants, including HBO and Silicon Valley law firm Cooley LLP, relocated to Hudson Yards. The vacant space was quickly filled by new tenants like Bank of America and digital marketing firm the Trade Desk.

Swig and Brookfield Property Partners — which bought into the property in 2006 when it acquired Trizec Properties in 2006 — have invested more than $160 million to renovate and lease the building since 2014. In 2017 the two firms jointly acquired the long-term leasehold on neighboring 1100 Sixth Avenue, where Bank of America replaced HBO as the sole office tenant.

This month, Bank of America and JPMorgan led a $1.3 billion refinancing of the property along with Credit Suisse and Deutsche Bank. Notes comprising the new debt are being contributed to several CMBS deals, and documents associated with these transactions provide an up-to-date look at the property’s finances.

The 1.56 million-square-foot property — split between 1.48 million square feet of office and 59,000 square feet of ground-floor retail — is now 95 percent leased with more than 35 tenants. Bank of America is the largest tenant by square footage, with 10 percent of total rentable space, but its annual rent bill is only the third-largest.

The Trade Desk, whose office includes the pricey three-floor penthouse, pays $131 per square foot in base rent, well above the building average of $95. “Big Three” management consultancy Bain & Company, which has been at the building since 2014, also pays triple-digit rent for its 120,000-square-foot space.

The two remaining tenants in the top five, Israel Discount Bank and venture capital firm Insight Partners, pay below-market rents for their spaces. The top tenants at the building all have remaining lease terms of at least 10 years, although the Trade Desk and Israel Discount Bank have early termination options.

Of the building’s five retail tenants, four have not made rent payments for the last few months, according to Moody’s, and rent deferral negotiations are in progress. The building’s parking tenant has defaulted on its lease after missing rent payments since March, and the landlords are in the process of bringing in a new parking operator.





    Related Articles

    arrow_forward_ios
    Hudson Yards (Getty, iStock)
    City’s bet on Hudson Yards beginning to pay off
    City’s bet on Hudson Yards beginning to pay off
    VTS CEO Nick Romito and Lane Technologies CEO Clinton Robinson 
    VTS to buy office-app developer for $200M
    VTS to buy office-app developer for $200M
    From left: Marisa Lago, Anita Laremont and Mayor Bill de Blasio (LinkedIn, Getty, Wikimedia)
    Politics, City Planning on collision course
    Politics, City Planning on collision course
    Hudson’s Bay Company restructures $846M CMBS loan
    Hudson’s Bay Company restructures $846M CMBS loan
    Hudson’s Bay Company restructures $846M CMBS loan
    Two of the eleven properties under threat of foreclosure (Google Maps)
    Mack Real Estate may “strip” club owner of properties
    Mack Real Estate may “strip” club owner of properties
    270 W Montauk Hwy, Hampton Bays, NY (Loopnet)
    Legendary Hampton Bays bar up for sale
    Legendary Hampton Bays bar up for sale
    Senator Chuck Schumer and 70 Prospect Park West (Google Maps, Getty)
    Schumer blasts Brooklyn landlord as NY pols vow to pass good cause eviction
    Schumer blasts Brooklyn landlord as NY pols vow to pass good cause eviction
    Prologis Chairman and CEO Hamid Moghadam (Getty, Prologis)
    Industrial space “effectively sold out” amid leasing frenzy, Prologis says
    Industrial space “effectively sold out” amid leasing frenzy, Prologis says
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...