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Following an extensive lobby and façade renovation for 10 Grand Central at 155 East 44th Street in Midtown East, Marx Realty will soon debut a collection of office suites on the top floors of the commercial tower. Located on floors 32 through 36, “The Penthouse Collection” can be configured as 5,000-square-foot single-floor leases or combined into a 10,000-square-foot duplex space or a 15,000-square-foot triplex office.
In 2019, Marx Realty completed an extensive overhaul of the building’s main lobby and lower level façade to provide more immediate access to Grand Central Terminal. The New York-based owner and developer reports over 178,000 square feet of new leases since the announcement of the renovation project and sought to capitalize on that momentum with The Penthouse Collection.
“The next logical step after bringing our one-of-a-kind hospitality aesthetic to 10 Grand Central was to provide the ultimate office experience for high-end users,” said Craig Deitelzweig, president and CEO of Marx Realty. “We’ve already attracted top-tier tenants and well-known groups to the building with our hotel-like ambiance, best-in-class service, and beautifully designed office spaces. The Penthouse Collection raises the bar even higher with ridiculously luxurious finishes and an experience comparable to a stay at the finest penthouse suite in a luxury hotel.”
With hospitality as the central motif, future tenants will have access to private elevators with a uniformed doorman, wood finishes including walnut and herringbone flooring, as well as a private bar and café. Floors 35 and 36 are connected by a grand staircase and open up to a 3,500-square-foot outdoor terrace and a separate 2,400-square-foot solarium positioned on the western edge of the suite. Ceiling heights of 20 feet and floor-to-ceiling windows offer direct views of the Chrysler Building and the surrounding architecture of Midtown East.
The asking rents for the penthouses are $130 per square foot.
The redesign was led by a Marx interior design team and David Burns, principal of Studios Architecture. JLL is handling all leasing on behalf of Marx Realty.
Marx takes over Cross County leasing, working on filling former Sears storePeter Katz | January 16, 2020
Marx Realty, which jointly owns the Cross County Shopping Center in Yonkers with Benenson Capital Management, is taking over leasing and management responsibilities for the 1,150,000-square-foot property. Marx is a division of New York City-based Merchants National Properties, which has a portfolio of 67 properties in 17 states.
Mark Utreras, formerly with Newmark Knight Frank (NKF), has been made Marx’s senior director of leasing and will be responsible for leasing at Cross County. In addition, Marx plans to hire up to 10 additional leasing team members. While at NKF, Utreras served as associate director representing landlords and developers such as RXR Realty, Muss Development and SL Green Realty. He was credited with completing retail lease transactions valued at more than $450 million.
“He will focus solely on Cross County Shopping Center, which is really the first time we’ve had someone dedicated to Cross County,” Craig Deitelzweig, president and CEO of Marx Realty, told the Business Journal. “He’ll get to know every tenant there, every tenant who wants to be there and every tenant that we’re focused on bringing to the center.”
The move to bring leasing and management directly under Marx’s wing coincides with an underlying transition program to build activity at the center and bring the former Sears store back into service following its closing in July 2019. The four-story building contains about 200,000 square feet of space.
“We are actually negotiating with some of the best tenants right now in the entire country for that site and we’re thinking of breaking it up into different floors,” Deitelzweig said. “We have various renderings of what the building could look like, but we do want to customize it due to specific tenant’s desires. There also are different schemes depending on the different sizes of the tenants, but I can tell you that it will be one of the most dynamic-looking areas in the entire center and in any center.” He did not disclose the prospects nor predict when leases might be signed.
Deitelzweig said although the Cross County store was the highest grossing in the U.S. for the Sears chain, the building didn’t seem physically connected to the rest of the shopping center.
“We’re going to connect it by different landscaping methods,” he said. “We will have different seating areas, different floor areas. It will have very much a town center feel to it.”
Deitelzweig said except for the former Sears store, Cross County is about 99% leased. He said they’ve been talking to some of the existing tenants about renewing their leases early in addition to retailers who would become new tenants.
“There are a lot of stores that are in other centers that are looking to leave those centers,” he said. “This center is almost a retail miracle because tenants are just dying to get into this space.”
Cross County was the first open-air shopping center in the U.S., opened in 1954 by developer Sol Atlas. Its history is not lost on Deitelzweig.
“We’re very mindful of our history and how emotionally people are attached to the center and it’s really part of their lives. We’re taking what’s good and making it better. It’s just really a matter of getting the right mix. Keeping those brands that resonate with the customer and bringing in fresh brands as well,” he said.
The Cross County Shopping Center is on 71 acres of land at the junction of the Cross County Parkway and New York State Thruway (Interstate 87). In response to a Business Journal inquiry last fall, Marx estimated that 11 million people visit the Cross County Shopping Center each year and an estimated 224,000 cars pass by the property daily. The center underwent a $250 million upgrade and modernization in 2011.
From foreclosure to fortune: Midtown building scores deal with Wall Street tenantDaniel Geiger | January 16, 2020
As 545 Madison Ave. slid into a financial morass, Global Trading Systems, a major equities market maker on Wall Street, grew tired of the situation.
The firm began to negotiate a deal to relocate to the Empire State Building.
Then in October last year, the Manhattan landlord, Marx Realty, took control of the property after a court action and pledged to invest millions of dollars to upgrade it and hold onto tenants.
In the case of GTS, the pitch worked. The company canceled its plans to move and completed a deal to remain at the 18-story, 140,000 square foot Plaza District office property and expand.
The firm renewed its hold on 14,000 square feet it occupies on the building’s 15th and 16th floors and took an additional 11,000 square feet of space on the 17th floor, space to accommodate growth and recent acquisitions by the firm. Asking rents for the spaces was $95 per square foot.
In December, GTS announced it had purchased an equities trading unit of the bank Barclays that added about 40 new employees.
“This tenant was out the door,” said Craig Deitelzweig, the president and CEO of Marx Realty. “They had a lease on the 77th floor of the Empire State Building that was very advanced. But we spoke to them and pledged how hands-on we’re going to be.”
Landlord Joe Sitt acquired a leasehold of 545 Madison Ave. in 2013 for $53 million, but last year fell into default on his mortgage for the property and on the leasehold interest’s rent, which was due to Marx Realty, which owned the land underneath the property.
Marx Realty took Sitt’s real estate company, Thor Equities, to state court and evicted it from the leasehold, taking over full ownership and management of the property. The firm plans to invest $22 million in building renovations and improvements, replicating a concept it has used to successfully reposition another Midtown building it owns, 10 Grand Central.
There, Marx installed hotel-like amenities, such as a doorman, music, a signature scent, concierge and tenant lounge and conference space.
“In today’s market, tenants are clearly drawn to buildings that have a forward-thinking concept,” said David Falk, the president of Newmark Knight Frank’s New York office, who wasn’t involved in the deal. “When deciding on whether to stay or relocate, the trend we are seeing is that companies seem drawn to those buildings that are being transformed in a noticeable way.”
Deitelzweig said Marx Realty plans to install a library in 545 Madison Ave.’s lobby with seating areas in alcoves that offer privacy. Instead of the white marbles that have become commonplace in many commercial office entrances in Midtown, Marx Realty will use materials such as walnut, velvet and bronze.
“There are so many buildings on the avenue that are simple but cold,” Deitelzweig said. “’We’re bringing in warm elements.”
About 35,000 square feet at the property remains vacant and Deitelzweig said that much of the leases for the remaining space, outside of the new lease with GTS, will expire in the next two years.
“We’re putting in this huge investment because we feel there’s real upside,” Deitelzweig said.
A spokesman for GTS didn’t immediately respond to a request for comment on the deal.
Renovated office towers are about to transform Third AvenueBy Lois Weiss | January 15, 2020 | 11:09pm
Third Avenue should win an award for the most office building makeovers.
Hospitality-minded owners are planning major revamps for several towers between East 42nd and 57th streets, with A-plus amenities targeting modern tenants.
Several office buildings have changed ownership or are in the midst of sales, while others are simply getting a huge influx of capital from long-term owners — with two planning to spend at least $100 million on upgrades.
Marx Realty has already transformed 708 Third into 10 Grand Central and asking rents now run from the $80s to $125 per foot.
While rents will rise in return, tenants get the most modern infrastructure, news windows and extra amenities. The city also gets more tax revenue from the higher incomes.
Recent leases at 711 Third Ave., owned by SL Green, include Strategic Family, the Center on Addiction & Substance Abuse and Goldberg Segalla.
“Third Avenue has a lot of promise,” observes Transwestern’s Lindsay Ornstein.
Early last year, 850 Third was purchased by Jacob Chetrit and his sons for $422 million — and they are buying 220 E. 42nd St. near Third for $815 million through Douglas Harmon of Cushman & Wakefield.
He is also marketing 900 Third Ave. at pricing of nearly $600 million.
“Investors are looking at Third as a value proposition,” says Eric Cagner of Newmark Knight Frank. “It is cheaper than anything in the Plaza District.”
Nuveen, the asset management arm of the Teachers Insurance and Annuity Association (TIAA), is planning makeovers for both 730 and 780 Third.
“We are bullish on the East Side,” says Nadir Settles of Nuveen.
The 665,000-square-foot 730 Third sits between East 45th and 46th streets. Here, Nuveen will spend “north” of $100 million as it replaces all the windows with ”view” glass (which adjusts to light automatically) and adds a dramatic ornamental staircase from the lobby to an amenity-filled second floor.
Nuveen is also creating what its leasing agent, Paul Amrich of CBRE, describes as “a massive rooftop terrace.” It already has a 400-person auditorium and conference center.
Nuveen’s 780 Third Ave., between East 48th and 49th streets, known for its red granite facade and unique crisscross design, will be getting a $40 million influx of capital and a new name: The Gardens.
“Here, you don’t have to think about doing the right thing, you just do it,” says Settles of the company’s investments in amenities, sustainable designs and other features. These will include greeters with electronic check-in clipboards rather than a traditional concierge desk. “It’s all about the tenants of tomorrow and competing for their business. This is the office of the future,” he says.
Architecture firm A+I is overseeing design changes, which include a lounge with food.
Nuveen will also build, own and operate a restaurant and become a neighborhood amenity. “Employees can come for lunch and sit and work,” adds Settles.
Upstairs, a gym is being transformed into a “wellness facility” that will feature yoga classes, plus an on-site doctor’s suite with visiting hours so workers can drop in at the first sign of a sniffle.
Echoing its new name, The Gardens’ trees and plantings will dot an outdoor plaza with new benches and lighting that mimic a residential project.
“Hospitality has merged with office,” says Amrich. “The experience is so unique, as it is blending greenery that will merge into the lobby.”
Also getting in on the renovation competition is the Durst Organization, which developed and owns several Third Avenue office buildings.
Its prime focus now is plowing over $110 million into the entirely vacant 825 Third on the eastern blockfront between East 50th and 51st streets after a 25-year net lease expired.
It will be left vacant while work is underway. This isn’t Durst’s first renovation rodeo, having spent $130 million sprucing up 1155 Sixth Ave. and $150 million on 151 W. 42nd St. — formerly 4 Times Square.
“825 Third will be our flagship building and have our flagship amenities,” says Tom Bow, executive vice president at Durst. Gensler is designing, targeting a LEED Gold designation, while Design Republic will be tasked with the amenities.
Its marble lobby will be updated with wood and metal details. New elevators and bathrooms are also in the works.
While amenities will be added to the lobby, a new staircase could lead to a second floor with more, depending on the future tenant of the podium, which goes to the 11th floor. The 12th-floor has a huge terrace. “View” glass will be used on the 12th through 40th floors.
A private lobby could also be created, says Ashley Aaron, senior managing director at Durst, who is working on the leasing and redevelopment project.
Podium asking rents are $78 per foot, while tower floors start at $84 per foot and bump to nearly $100 at the top, where a double-height floor could be made.
Outside will be all new storefronts and the surrounding plaza will be renovated.
With sustainability and “green” construction in the Dursts’ DNA, nearly everything is being recycled.
Notes Michael Cohen of Colliers, “A location like Third Avenue could become the Midtown South of the 21st century.”
Marx Realty nearing full occupancy repositioned 10 Grand Centralby REW | December 12, 2019
Marx Realty (MNPP) announced that content targeting company ZEFR signed a 15,000 s/f 10-year lease on the 13th floor at 10 Grand Central, relocating from 292 Madison Ave.
On the heels of signing data onboarding service Crux Informatics, insurance giant MassMutual and Agence France-Presse, 10 Grand Central continues to attract firms enamored by the tower’s hospitality-infused aesthetic.
Marx Realty has signed 193,000 s/f of new leases since the announcement of the building’s repositioning in mid-2018. During that time, occupancy has increased from 78 percent to 93 percent.
“ZEFR is the type of cutting-edge tenant that gravitates towards the authentic and highly designed hospitality-like office space that uniquely defines 10 Grand Central,” said Craig Deitelzweig, president and CEO of Marx Realty.
High-profile tenants at 10 Grand Central include Dwayne “The Rock” Johnson’s production company, Seven Bucks Productions; UK-based sports private equity firm 23 Capital; asset management firm Everside Capital Partners; and, educational technology company Decoded.
The recent completion of a redesigned four-story entry portal, marquee, lobby, lounge, Ivy terrace, and 40-seat conference space was part of the $48 million repositioning of the 35-story Ely Jacques-Kahn designed office tower.
JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer are handling the leasing for Marx Realty. TAsking rents range between $82 and $130 psf.
ZEFR Continues Marx Realty’s Leasing Streak at 10 Grand Central
December 2, 2019
Content targeting company ZEFR signed a 15,000-square-foot, 10-year lease at Marx Realty’s 10 Grand Central. The company is relocating from 292 Madison Ave.
JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer are handling lease-up at the repositioned Midtown East property. Since Marx Realty began the property’s $48-million makeover in mid-2018, occupancy has increased from 78% to 93%.
“ZEFR is the type of cutting-edge tenant that gravitates towards the authentic and highly designed hospitality-like office space that uniquely defines 10 Grand Central,” said Craig Deitelzweig, Marx Realty’s CEO. “They instantly fell in love with the warm and inviting nature of the building, and they know that no other space would better help them in attracting the best talent in New York.”
Other recent signings at 10 Grand Central include Crux Informatics, a Goldman Sachs-based provider of data onboarding services; insurance giant MassMutual and international news agency Agence France-Presse.
Modernization, Preservation of Iconic ‘Department Building’ Now Complete DowntownPOST BY: KAMILLE D. WHITTAKER | NOVEMBER 22, 2019
Local design firm ASD | SKY managed the redesign.
The 1920s-era Regenstein’s Department Store at 207 Peachtree just got a new name and feel.
A $10.5 million hotel-like modernization and preservation of the newly dubbed “Department Building” by New York-based Marx Realty now offers 20,000 square feet of retail and 30,000 square feet of modern creative office space, walking distance from MARTA’s Peachtree Station.
“The repositioning has allowed us to maintain the building’s original and authentic character while modernizing it with state-of-the-art office space suitable for today’s technology-driven tenants,” said Craig Deitelzweig, President & CEO of Marx Realty in a press release.
The historic building envelope as well as the original Art Deco design elements have been preserved which includes features such as 18-foot ceiling heights, terracotta barrel-vaulted ceilings, fluted columns, and original wood floors, as well as the expansive loft-style floorplates and oversized windows.
What’s new: a dedicated lobby and a rooftop deck that will provide unobstructed views up and down Peachtree Street and of Stone Mountain.
Marx Realty announced earlier this year that Saito – Sushi, Steak and Cocktails and restaurateur Stephen de Haan inked a deal to lease 2,200 square feet of space on the first floor of the building.
BY REBECCA BAIRD-REMBA | NOVEMBER 26, 2019 9:57 AM
Los Angeles-based video advertising company ZEFR is moving into Marx Realty’s 10 Grand Central in Midtown East, according to the landlord.SEE
The video targeting platform is leaving nearby 292 Madison Avenue for 15,000 square feet on the 13th floor of the 35-story, Art Deco office tower at the corner of East 44th Street and Third Avenue. Asking rent in the 10-year lease was $86 per square foot.
JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmerrepresented the landlord in the deal, while Cresa‘s Jane Roundell and David Toomey handled the transaction for the tenant.
ZEFR “wanted to look at Midtown South initially and what they liked about 10 Grand Central is that it’s a Midtown South building but more conveniently located and with more amenities,” explained Marx CEO Craig Deitzelweig. “Initially they were attracted to another floor and we leased that space, so we moved some tenants around to get [them] a larger space. It’s just a testament to their desire to be in the building.”
Marx recently completed a $48 million renovation of the building that included a new lobby, a new four-story entrance on the East 44th Street side of the building, prebuilt office suites, and a 1930s-inspired lounge and terrace with a fire pit and plantings on the seventh floor.
Other tenants in the building include data management startup Crux Informatics, MassMutual, asset management firm Everside Capital Partners, the Association of National Advertisers and Dwayne “The Rock” Johnson’s company, Seven Bucks Productions.
Why Own a Property When You Can Profit From the Dirt Below?The practice of creating ground leases is becoming more popular
By Peter Grant | Nov. 26, 2019 7:00 am ET
Instead of buying or developing buildings, more commercial real-estate investors want only the ground beneath them.
The practice of separating a property from the land, and then renting out that ground to a developer on a long-term basis, is known as creating a ground lease. It is viewed as safer than owning the property because real-estate risk mostly falls to building owners, who usually need to finance a purchase or construction, pay for future renovations and fill the space with tenants.
“You just own the dirt,” said Darcy Stacom, chairman of CBRE Group’s capital markets group in New York.
The business has ballooned in recent years as the prices of most major types of property have rallied for most of the past decade and are starting to look expensive.
This year, investors created ground-lease deals for at least seven major New York City buildings, including the H&M anchored office building on Fifth Avenue and the historic American Telephone & Telegraph Co. building in the Financial District, according to CBRE. The firm knows of only one such deal in 2018.
Investors are also buying the land under properties in Washington, D.C., Philadelphia, San Antonio and Austin, according to buyers and brokers.
The deals still carry some risk for the ground owner. Ground rents typically rise over the term of the lease, but they could fall far behind inflation over the decades, causing the ground lease to lose value.
Owners of buildings, meanwhile, may find it increasingly hard to finance properties on someone else’s land. When the lease expires, land owners get to own the buildings.
“Down the road, there’s typically a day of reckoning that happens,” said Jade Rahmani, an analyst at Keefe, Bruyette & Woods who follows the ground lease business.
Still, some investors see the business only growing. Jay Sugarman, chief executive of the real-estate investment iStar Inc., said investors have barely scratched the surface of separating the ground below trillions of dollars of U.S. commercial real estate.
“We’ve only touched a fraction of it,” he said.
In June 2017, iStar spun off a business that specializes in creating and owning ground leases, now known as Safehold Inc. Mr. Sugarman, who is also chief executive of Safehold, expects the real-estate investment trust to own assets with a total value of $2.5 billion by the end of this year, up from $340 million when it did its initial public offering.
Dividing properties into the land and the structure goes back centuries. Land owners create a long-term ground lease up to 99 years. The leasehold owner pays a ground rent. While the landowners get ownership of the buildings when the lease ends, in most cases they prefer to create a new lease.
Some of the most well-known New York skyscrapers, such as the Chrysler Building, are on leased land.
For a number of years the ground-lease business was discredited by a number of high-profile financial shocks. This was because formulas for rent increases were often dictated by land values. In New York, as values soared, such increases have triggered financial headaches for building owners.
With Lever House, a New York City office building, developer RFR Holding LLC hasn’t been able to refinance the Park Avenue tower because the ground rent is set to rise from $6.15 million to more than $20 million in 2023, according to people familiar with the matter.
“Everyone has an anecdote of a horror story from a ground lease that destroyed value,” said Mr. Sugarman.
An RFR representative declined to comment.
Ground leases are now being structured without the onerous reset provisions that base rent increases on property values. Most new resets are tied to inflation and capped beyond a certain level.
“No one will agree to the old structure,” said Craig Deitelzweig, chief executive of Marx Realty, which has been in the ground-lease business for much of its 104-year history.
These new long-term leases are attractive to investors who want to control a building but hold their costs down, said Joe Bous, a principal at Valor Ground Lease Ventures, which specializes in this business. Investors typically can get back 30% to 40% of what they pay by selling the ground lease, he added.
“If you could lock in about one third of your value structure with 100-year money, isn’t that a good thing if you believe interest rates are going to go to five or six or 7%?” Mr. Bous asked.
Zefr Signs 15,000-Square-Foot Lease at 10 Grand CentralNovember 25, 2019
Content targeting company Zefr has signed a 15,000-square-foot, 10-year lease on the 13th floor at 10 Grand Central, announced building owner and manager Marx Realty. The company is relocating from 292 Madison Avenue.
“Zefr is the type of cutting-edge tenant that gravitates towards the authentic and highly designed hospitality-like office space that uniquely defines 10 Grand Central,” said Craig Deitelzweig, president and CEO of Marx Realty. “They instantly fell in love with the warm and inviting nature of the building and they know that no other space would better help them in attracting the best talent in New York.”
The recent completion of a redesigned four-story entry portal, marquee, lobby, lounge, Ivy terrace, and 40-seat conference space was part of the $48 million repositioning of the 35-story Ely Jacques-Kahn designed office tower. In addition, the repositioning included a new façade with a soaring marquee featuring brass fins and oversized walnut doors. Amenities include a well-appointed lounge with ample seating and a café, a conference facility with seating for 40 and The Ivy Terrace, an inviting outdoor space reminiscent of a 1930s era garden party.
Marx Realty has signed 193,000 square feet of new leases since the announcement of the building’s repositioning in mid-2018. During that time, occupancy has increased from 78% to 93%.
JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer are leading a team handling the leasing for Marx Realty. The building’s asking rents range between $82 and $130 per square foot.