A fledgling hedge fund has found its new home at Boston Properties’ LEED for Core and Shell Gold-hopeful, Moed de Armas & Shannon-designed 510 Madison Avenue: the 30-story, 350,000-square-foot tower that was completed in 2009. The fund is Panning Capital, and it’s leased 4500 square feet on the tower’s 24th floor – about 40 percent of the total – in a 10-year deal for $128 per square foot. Occupancy is slated for sometime later this month.
Although Panning didn’t identify its green components as a specific drawing card, a company spokesperson told Crain’s that 510 Madison “is a brand-new, trophy-quality building with robust information technology infrastructure,” much of which supports the tower’s advanced building features and comprehensive operations and maintenance plan. Still, the tower’s now stable ownership (after it traded hands from Harry Macklowe in 2010) and prime Plaza District location were also high on Panning’s list of reasons for selecting 510 Madison after checking out 15 other Midtown office buildings, according to Crain’s.
But in what could be a function of the higher floor or a better Manhattan leasing environment, the asking rents are significantly higher than those that Boston Properties received last year for two other pre-built spaces (around $90 per square foot), which had brokers calling 510 Madison one of Midtown’s best bargains. Though not entirely clear to us, it does seem likely that Panning took a similar pre-built suite: after those same deals last year (also with financial industry firms), Boston Properties divided the tower’s 10th, 18th, and 24th floors into additional pre-builts ranging in size from 2500 to 7000 square feet.
Pre-built suites, of course, are typically geared towards smaller tenants (10,000 square feet or less) who must identify and secure commercial office space just a few months before they need it and won’t have time to hire a full-blown design and construction project team. In the current leasing climate, they can represent good value for the right types of tenants.