By Patrick Hedlund
Two longstanding Lower East Side commercial buildings featuring nearly 22,000 square feet of space combined have hit the market on Essex and Ludlow Sts.
Owned by neighborhood merchandiser Eisner Brothers, the properties at 75 Essex St. and 55 Ludlow St. have acted as storage for the company’s wares for years before coming online in recent weeks.
The warehouse at 75 Essex St. — featuring 12,500 square feet over four stories with 20-foot ceilings, and including more than 19,000 square feet of air rights — would suit a discount clothing retailer, said James Famularo, senior executive managing director at Coldwell Banker Commercial. An automotive-supplies store and several major drugstore chains have already expressed interest in the space, but Famularo believes a lower-cost clothing store like TJ Maxx would prove a better fit.
“I can definitely see an escalator being put in there and shopping on every level,” he said, pointing to the Bloomingdale’s on Broadway between Spring and Prince Sts. in Soho. “A big discount clothing retailer would probably be the optimal use.”
With an asking rent of $60 per square foot for the space, multiple nightclub operators have shown interest, Famularo said. But the broker added that the property’s location across the street from a school and the owners’ unwillingness to see it used as a late-night venue have limited the options.
Just down the street, the six-story property at 55 Ludlow St. has also gotten its share of interest from prospective tenants, most recently from a nightlife venture and a private school, said broker Lauren Schelsinger. The property, between Grand and Hester Sts., contains a full basement, backyard, elevator and 11-to13-foot ceilings throughout, and is rentable for $36 per square foot.
“Even with this rate,” Schlesinger said, “everything’s negotiable.”
S.O.M. staying put
Renowned architectural firm Skidmore, Owings and Merrill announced recently that the company will stay in Lower Manhattan by renewing its lease for two full floors on Wall St.
The firm inked a new lease for 65,397 square feet of space at 14 Wall St., comprising the entire 24th and 25th floors of the 37-story building near Nassau St.
“Economics and flexibility were key drivers in this transaction,” said Michael Colacino, president of the commercial real estate firm Studley, who represented S.O.M., in a statement. “Had the stay-put option not come to fruition, we had negotiated several creative and affordable alternatives for S.O.M. in other buildings Downtown and in other submarkets including the Flatiron District, Chelsea, the Far West Side and Tribeca.”
According to Studley, the deal included an ample concession package and expansion options that will enable the architecture firm to remain in the building for years to come.
‘For Rent’ sign of times
During the less than two years it took for the nation’s credit crisis to develop into a full-fledged meltdown, available sublease space in Manhattan rose nearly 50 percent, ending 2008 at a level not seen since after 9/11.
According to a report from Jones Lang LaSalle, 4 million square feet of sublease space has come onto the market over the past 18 months, finishing last year with a total of approximately 12 million square feet across the borough.
Of that total square footage, 2.7 million lies in the Downtown market, south of Canal St., while the Midtown market claims 9.9 million square feet. More than three-quarters of Downtown’s available sublease space, 2.1 million square feet, is located in Class A properties.
“While layoffs were announced throughout 2008, sublease options did not begin coming to the market until the latter part of the year,” said James Delmonte, vice president and director of research at J.L.L.’s New York office. “We anticipate Manhattan will see rising levels of sublease space into at least midyear 2009.”
At the peak of the previous down cycle, from 2001 to 2004, Manhattan posted a total of 14.4 million square feet of sublease space, the report stated.
In New York, leasing volume has fallen nearly 41 percent since the second quarter of 2007. Manhattan posted 4.4 million square feet of leasing activity at the end of 2008, compared to 7.5 million square feet in deal volume in the second quarter of 2007.
According to the report, due to the spike in sublease space and slowing tenant demand, the average asking rental price for office space in the borough dropped 3.1 percent over the past two quarters, falling to $70.19 per square foot in the final quarter of the year from $72.37 per square foot in the second quarter of 2008.
Nationally, available sublease space has climbed 28.5 percent since the second quarter of 2007, and is expected to increase even more in the coming months as continued job cuts reduce the need for office space. In the fourth quarter of last year, according to J.L.L.’s nationwide tally of the country’s top retail markets, sublease space rose by nearly 7 million square feet from the previous quarter, with another 40 million to 50 million square feet to possibly come online by mid-2009.
200 more at 20 Exchange
After initially staggering the opening of rental units at the new residential tower at 20 Exchange Place, the owner/developer has decided to place the building’s remaining 200 units on the market.
The apartments, located on floors 16 through 57, are available for immediate occupancy starting at $2,100 per month — a more than 15 percent discount from the building’s previous prices from less than a year ago, when it put 350 units on the market.
To spur activity, qualified renters with solid credit will have their security deposits waived, and the development’s amenity package includes courtesy cruiser bicycles for renters, a fitness center, lounge area and 19th floor sundeck slated to open this spring.
“Twenty Exchange Place has become the development of choice for renters looking to gain a foothold in the Financial District,” said Jack Berman, vice president of Metro Loft Management, the building’s owner/developer, in a statement. “We’re thrilled to release the remaining apartments and offer discerning renters a chance to reside in one of the city’s landmark buildings.”