By Dan Geiger
The law firm Grais & Ellsworth is close to a deal to sublease the entire 32nd floor of 1211 Avenue of the Americas.
The space is about 40,000 s/f and is being offered by the law firm Ropes & Gray, which took the floor in 2008 in order to exercise rights to grow in the property.
Ropes & Gray leased about 250,000 s/f in the nearly two million square feet skyscraper in 2005 and plans to eventually use the 32nd floor to expand.
Representatives from both Grais & Ellsworth and Ropes & Gray declined to comment on the deal.
Brokers familiar with the space say that Ropes & Gray has outfitted the floor with an office installation in order to ready it for its own occupancy.
The fact that the master tenant is a law firm likely makes the space especially suitable for Grais & Ellsworth. Law firms tend to prefer a distinct type of office layout, according to real estate experts, with the perimeter space dedicated to windowed offices for partners and senior attorneys and also space alloted to filing systems that allow firms to organize the prodigious amounts of paperwork they must typically keep on hand.
Sources say that Grais & Ellsworth is negotiating a seven-year deal for the space with an option to leave after five years. Rents were not available by press time. Although the agency team that handles deals in the building does not make public an asking rate for space, people familiar with the building say rents for space being offered directly by the landlord generally range between $70 and $85 psf, depending on the floor.
The sublease will allow Ropes & Gray to net income on the vacant floor until its growth is sufficient enough to fill the space itself. The firm’s lease in the building stretches until 2027.
Though Ropes & Gray is a large tenant, 1211 Avenue of the Americas is predominantly leased by the television and media conglomerate News Corporation, which occupies about one million square feet in the property. Only the tower’s top four floors, 41-44, totaling 160,000 s/f, are available, beginning next year.
A team from the real estate services firm Cushman & Wakefield handles leasing at the property for owner Beacon Properties. It’s not clear however if any deals will get done for the vacancy.
In recent months, Beacon hired the brokerage company Eastdil Secured to market the property for sale. According to sources, Beacon put the effort on hold after offers for the asset came in hundreds of millions of dollars below the roughly $2 billion it was seeking.
Sources say that the firm will likely test the market again next year, which puts into question how willing it will be to try to fill the tower space.
If the commercial leasing market begins to rise, attaching a valuable vacant block as a potential opportunity for a buyer to capture high rents could make the building more alluring on the auctioning block to potential bidders.
