A New York City-based investment firm recently expanded its footprint in one of the city's most prestigious and pricey office buildings, the General Motors Building on Fifth Avenue, across from the Plaza Hotel. In the deal, York Capital Management inked a 10-year sublease in which it added 7,180 square feet and renewed its 46,270-square-foot lease for space on the 17th floor and a portion of the 21st floor, taking additional space on the 23rd floor.
"This is a solid company showing its faith in New York," said L. Craig Lemle of Studley, who represented York Capital in the transaction. He noted that the firm also has satellite offices in Hong Kong and London. "It is a testament to all of the good things happening here."
Nonetheless, the expansion of York Capital, which boasts assets of $21 billion under management, remains the exception rather than the rule among financial firms. Major investment banks in recent years have been downsizing in the face of rising costs, an uncertain regulatory environment, and weak volumes. In Manhattan, these financial firms are still the biggest space user, but have not played as strong a role in commercial leasing activity compared to years past, according to a first-quarter report from Studley.
"Investment banking in Manhattan is not what it was fifteen years ago, and does not appear likely to come back full force in the short term," the report noted.
But Mr. Lemle, who has represented York Capital in six other lease transactions over the last 20 years, spent a year scouring the city for a new location before the firm decided to stay put in the 59-story building that occupies the entire block between East 58th and East 59th streets. There, asking rents range from $125 to $225 per square foot—among the highest in the city.
That decision kept York Capital in the tony Plaza District, which had a lower vacancy rate and a higher average rent than midtown south, one of the most sought-after sub-markets in Manhattan, according to Studley's report.Mitchell Steir, chair of Studley, represented York Capital along with Mr. Lemle, while Andy Levin and Adam Frazier represented the landlord, Boston Properties, in-house.
The expanded space on the 23rd floor was signed through a sublease from law firm Weil Gotshal & Manges, the largest tenant in the building. Subleased space is typically significantly less expensive than leasing directly from the landlord.Financial firm grows footprint in GM Building
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