By Al Barbarino
With the recent signing of investment advisor Peter B. Cannell & Co. at 545 Madison Ave., LCOR’s redeveloped, LEED Gold Class-A tower in the Plaza District is nearly 90 percent leased.
For LCOR, a real estate investment and development company, the achievement is both a milestone and a relief, having delivered the building — located at the corner of 55th Street and Madison — in the fall of 2008 into a depressed market. “It’s like asking the Olympic athletes how it feels to win a gold medal — it’s great,” said David Sigman, EVP and principal at LCOR.
“The plan was to have it leased two years ago, but unfortunately the launch coincided with the market’s collapse. But ultimately this is a great building in a great location, which led to our recent success.”
LCOR signed a 75-year ground lease from owner Marx Realty and Improvement at end of 2006, gut-rehabilitated the property under the guidelines of the LEED-CS (core and shell) system and achieved Gold status with the U.S. Green Buildings Council.
Because tenant leases were on the verge of expiring when LCOR picked up the project, the company was able to create the new structure almost from scratch, replacing the existing 1955 façade with a glass curtain wall and installing state-of-the-art electrical, mechanical systems, generators and elevators.
“Virtually nothing from the original building remains,” Sigman said. “This helped us establish this degree of renovation so people wouldn’t think of this as just some old building on 55th Street.”
Peter B. Cannell & Co., represented by Cushman and Wakefield’s Don Preate and Jon Mayeske, just signed a 10-year lease for the entire 8,802 s/f 11th floor; a CBRE team led by Gregg Rothkin, Paul Milunec, Keith Cody, Robert Kluge and Bob Flippin represented LCOR.
CBRE was brought on board in the fall of 2010 to resume the marketing efforts initiated by Jones Lang LaSalle, the original brokerage handling leasing at the property, and has completed roughly two-thirds of the leases at the building.
“It was the perfect storm that led to the recent flurry of activity,” said Rothkin, a SVP at CBRE. “LCOR did a fantastic job with the renovation. Meanwhile the market realized that this building is a good value, with an owner who understands the market and is ready and able to make quick deals.”
In June, Ogden CAP signed a 27,000 sq. ft. lease, scooping up the fourth, fifth and sixth floors, making the residential real estate owner/manager the building’s largest tenant.
Other tenants, many include Cliffwater LLC, BHR Capital LLC, RNK Capital, Siemens Enterprise Communications and the Home Shopping Network. Retail tenants include Alfred Dunhill, Oscar Blandi and Officine Panerai.
It was when the market stabilized in 2010 that virtually all the building’s financial services tenants came to the building, Sigman said, adding that the third and 16th floors (9,282 s/f and 6,877 s/f, respectively) remain vacant, with rents in the building running in the low 70’s to low 80’s psf.
“We were looking for the tenants from financial services tenants looking for full-floor identity without having to spend 150 a foot,” CBRE’s Rothkin added.
LCOR was formed in 1992 and specializes in developing mid- and high-rise urban properties, including large-scale multifamily, commercial, and mixed-use properties.
The firm has acquired, developed and operated a diversified encompassing more than 20,000 residential units and more than 19 million square feet of commercial space with the value of developments completed or under construction totaling in excess of $7 billion.
In 2010, the Greater New York Construction User Council recognized 545 Madison Ave. as the top office redevelopment project of 2010.