A major financial services organization managed to ink a deal amid Manhattan’s sky-high sublease market.
The Teachers Insurance and Annuity Association is subletting 40,000 square feet to risk advisory firm K2 Integrity at 730 Third Avenue, the Commercial Observer reported. K2 will be relocating from three noncontiguous floors at 845 Third Avenue.
The sublease for TIAA’s space, which the firm has never occupied, ends in 2035. Asking rents for the sublease were in the mid-$60s per square foot. The space will reportedly be a benefit to K2 after it recently acquired Financial Integrity Network.
JLL’s Scott Vinett represented TIAA, while Savills’ David Carlos and Andrew Dzenis represented K2.
TIAA put its Midtown headquarters building up for sale in 2018. After nearly nine months, however, the firm reversed course and pulled it off the market, saying it would be more prudent to rent out some of it and modernize the space for employees.
TIAA has owned the building between East 45th and East 46th streets since 1955. The 27-story tall building spans 665,000 square feet and counts Men’s Warehouse among its tenants.
Read more
Commercial
New York
Office space up for sublease back on the rise
Commercial
New York
On second thought, TIAA doesn’t want to sell its headquarters
Commercial
New York
TIAA’s Midtown office building snags $29M in C-PACE financing
Last year, Greenworks Lending announced that it closed on $28 million in C-PACE financing for the building, which will provide for energy efficient upgrades including smart windows, as well as lighting upgrades and roof insulation. Greenworks was acquired by Nuveen Real Estate last year, which is itself a subsidiary of TIAA.
Nuveen and Taconic Partners have helmed the $120 million renovation of the office building. The C-PACE financing, which provides upfront costs for energy efficiency and clean energy improvements to buildings, is expected to help the building avoid nearly $100,000 in annual fines under Local Law 97.
The widespread increase in permanent hybrid work situations spurred a recent lift in the sublease market. Sublease availability in the United States rose 3.6 percent to 159 million square feet in the first quarter, according to CBRE.
Sublease space available in Manhattan also neared record highs. According to Savills, more than 20.2 million square feet were available in the first quarter. That figure is down from the 22 million square feet available a year ago, but well above the 13.6 million square feet up for grabs in the first quarter of 2020.
[CO] — Holden Walter-Warner