In February of this year, 866 United Nations Plaza, a 471,000 s/f Class-A office building located on 48th Street, between First Avenue and FDR Drive, launched sales of its newly converted commercial condo units.
Office condominium specialist, Rudder Property Group is exclusively marketing office units at the property,which includes office, retail and garage space. The project is sponsored by an affiliate of Meadow Partners, a privately owned real estate investment and asset management firm.
“The building is about 471,000s/f and, for a long time it’s been owned by Vornado,” Michael Rudder, principal of Rudder Property Group told Real Estate Weekly. “It’s been 95 to 100 percent occupied, mostly by governments and missions.”
The building’s current tenant base is strongly influenced by its close proximity to the main hub of the United Nations.
“Ownership has long been a preference in the United Nations submarket. Converting 866 United Nations Plaza to an office condominium is satisfying an unmet demand for tenants who want an office in this area and who recognize the benefits of ownership,” Rudder said.
“Purchasing space allows a tenant to lock in their occupancy costs, protect themselves from the always rising price of leasing in Manhattan, avoid paying taxes if they’re a tax-exempt entity, and ensure their ability to maintain control of their office space. For those foreign organizations associated with the United Nations, the prestige of owning in this building also paints their country, as well as their commitment to the United Nations, in a very good light.”
Rudder expects a relatively low rate of turnover and expects that new tenants will only make up about 30 percent of the tenants for the building.
“We’re selling the spaces to those who are interested and some spaces that aren’t occupied we’re selling those to outsiders, not just the existing tenants,” Rudder said. “For the most part, our business plan is to sell to the existing tenants here. We expect (the current) groups will buy their space and there’s been a great reception from them.”
New sales aren’t closing until the first quarter of 2016, but an entity that provides wheelchairs to under-developed countries and was based just in Midtown is opting to take advantage of the new ownership opportunity.
“We are under contract with a non-profit group that actually owned an office condo in the Flatiron District,” Rudder said. “They took advantage of the extremely high pricing that’s going on there and downsized to (a space at the) UN.” 866 United Nations Plaza is a six-story office building situated at the base of two 32-story luxury residential towers that are separately owned and not a part of the offering.
The office property, developed in 1965, was designed by the lead architect for the United Nations complex, and is the only office property located adjacent to the headquarters of the United Nations.
For the past few decades, it has remained close to 100 percent leased, a situation attributed to the building’s high-quality infrastructure and modern design.
The property is currently home to the highest concentration of United Nations missions, foreign consulates, and non-governmental organizations (NGOs) in New York City.
Each floor totals 78,000 s/f and is comprised of units that range in size from less than 1,000 to more than 50,000 s/f. Units can also be combined or reduced to accommodate users of varying sizes. Sale prices range from under $1 million to over $60 million.
866 United Nations Plaza is a full-service building, institutionally managed and operated by Jones Lang LaSalle. Building services are provided by a team of engineering staff, security guards, porters and cleaning personnel.
The building features two lobbies attended by security 24/7/365, six high-speed elevators, a separate service entrance with loading dock and oversized freight elevator and an underground parking garage offering direct access to FDR Drive.
The 41,500 s/f underground parking garage, as well as three retail condominiums with frontage along First Avenue, will also be a part of the condominium offering at 866 United Nations Plaza. These units will be marketed for sale at a later date by Glenn Tolchin and Jon Caplan of Jones Lang LaSalle.