Final Asking Rents at LEED Platinum Bank of America Tower Hit $185/SF

Hedge fund HBK Investments, which last summer signed on for LEED Platinum hopeful Bank of America Tower’s 40th floor at $135 per square foot, has officially terminated its commitment for 12,000 square feet of that space. The Dallas-based firm will still retain 24,000 square feet on the 40th floor and the Dursts will now seek to lease the freshly freed space for an incredible $185 per square foot. The only space in the building that remains in addition to HBK’s former space is 30,000 square feet on the 37th floor, where the Dursts are asking the same rent; the family will consider partitioning either space into blocks for smaller tenants. According to Eric Engelhardt, one of Durst’s vice presidents for leasing, “[t]here is a greater universe of smaller tenants looking for high end space.” (To that end, note 510 Madison Avenue, where each full-floor block of space is less than 15,000 square feet and the Macklowes have only signed up one tenant to date after coming close to inking Apple a few weeks ago).

But back to One Bryant Park- Bank of America will occupy 1.6 million of the tower’s 2.1 million square feet. Real Estate Weekly points out that smaller investment firms that have avoided the subprime mess currently plaguing large financial services sector tenants are still looking for the smaller blocks of space that Durst hopes to create on the tower’s final two available floors. For example, REW notes that hedge fund Harbinger Capital paid $180 per square foot for 20,000 square feet at 450 Park Avenue, while across Sixth Avenue at the Grace Building investment fund Clarium signed up for 30,000 square feet at $100 per square foot.

Again, it’s very difficult to draw conclusions with respect to what premium- if any- Bank of America Tower’s green features are responsible for commanding. Although the building will be New York City’s first LEED Platinum commercial high-rise, the astronomical rents seem more attributable to the tower’s prime Midtown location adjacent to Bryant Park and numerous subway lines. Even anecdotally, there are very few peer commercial buildings in Midtown currently seeking LEED certification with which to make comparisons. Moreover, as Scott Muldavin of the Green Building Finance Consortium noted in his critique of this year’s CoStar study (which found an $11.33 per square foot premium for LEED- and Energy Star-certified commercial space), it’s extremely difficult to tie a building’s specific green features with a corresponding premium. Perhaps the answer is that we’ll just have to wait until tenants move into their space and can report on exactly how the building is performing before we can draw any real conclusions about the role green is playing in driving asking rents.

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