Another commercial office project in Midtown that’s seeking LEED certification may be in trouble. After last week’s news that Boston Properties had suspended work at its LEED Gold hopeful 250 West 55th Street after potential anchor tenant Proskauer Rose balked at further lease negotiations, Macklowe Properties now may face the same scenario after rumors surfaced earlier today that the sole tenant it had inked at its LEED Gold hopeful 510 Madison Avenue may be close to exercising an escape clause in its lease.
Crain’s reported today that investment firm Jay Goldman & Co., which signed a 10-year lease for 11,500 square feet across the 30-story tower’s 19th floor at $150 per square foot in December of 2007, is close to backing out of the deal thanks to a number of opt-out clauses in its lease with Macklowe. According to Newmark Knight Frank principal William Cohen, who handles leasing at Jay Goldman’s current home at the Carnegie Hall Tower at 152 West 57th Street, “[i]t is all set for them to stay [at 152 West 57th Street]. Our arrangement is done.”
I think that this is important to note for a couple of reasons. First, 510 Madison is the second Class A, speculative Midtown high-rise seeking LEED certification that has lost a major tenant in the past two weeks. Second, both towers were designed for specific types of tenants- 250 West 55th Street for law firms, 510 Madison for high-end boutique investors. With both of these sectors softening (see last week’s news about mass law firm layoffs), these types of new commercial projects – regardless of whether they are pursuing LEED certification or implementing green design features – may truly be dead in the water.
It’s a shame too; 510 Madison will boast four times more filtered natural air to working spaces than required by code, floor-to-ceiling, low-e windows, reflective roof surfaces, and fresh air louvers that are waterproof. Regardless, much of what we’ve been writing about here at gbNYC recently has focused on commercial interiors, public sector, and smaller residential projects by virtue of the lack of activity in the commercial marketplace. Accordingly, we’ll be keeping a close eye on 510 Madison, 11 Times Square, the Argonaut Building, and other green commercial office projects in the coming weeks as the turmoil on Wall Street continues to rip through the local real estate scene.
Just to quickly recap, 510 Madison is located at the southeast corner of East 53rd Street and was designed by SCLE Architects with collaboration from Moed de Armas & Shannon. Each floor plate in the building is 15,000 square feet or smaller; trusses on the sixth floor transfer structural loads to three interior base columns and allow for column-free tower floors (ideal for financial services tenants). The tower topped out last August and does have one retail tenant lined up- watch purveyor Tourneau signed a 3300-square-foot lease for retail space at the building’s East 53rd Street corner last July.