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Douglas Sams
A $10.5 million modernization of downtown’s former Regenstein’s Department Store into a potential destination for creative class companies is the latest sign of downtown’s “renaissance,” says the project’s owner.
Marx Realty, the New York-based owner, developer and manager of the property, recently finished renovations at 207 Peachtree. The 1920s building features Art Deco design, terracotta barrel-vaulted ceilings, fluted columns, and 18-foot ceilings.
Marx is rebranding the property as The Department Building, paying homage to its former use as Regenstein’s.
Architecture firm ASD | SKY led the redesign.
The project is geared to potential tenants in industries such as tech and advertising. One source of interest may come from out-of-town companies putting a foothold in Atlanta.
Those companies typically rent co-working space as they ramp up their expansion, before signing a long-term lease in a new building.
A potential tenant is in discussions to occupy one floor at 207 Peachtree, said Jeff Bellamy, with Jones Lang LaSalle, who is marketing the property along with JLL’s Claire Ross.
The Department Building features 25,000 square feet of loft office space.
Craig Deitelzweig, president and CEO of Marx Realty, said “The downtown Atlanta neighborhood has been experiencing a renaissance in the last few years. … The office and retail tenants who choose to take space here will attract a new generation of creative office users that will build on the neighborhood’s strong growth.”
The modernization of 207 Peachtree is one of several new projects in the area. Last year, developers started work on a 29-story high-rise with 345 apartments, including 70 affordable units at the nearby Peachtree Center development.
Marx Realty unveils plans for Penthouse Collection at 10 Grand CentralNovember 05, 2019
Manhattan, NY Marx Realty (MNPP) will transform the top five floors at its 10 Grand Central office tower into a suite of penthouse offices. Dubbed The Penthouse Collection, the offices can be configured as 5,000 s/f single-floor leases or combined into a 10,000 s/f duplex space or a 15,000 s/f triplex office. The spaces on floors 32-36 will be reinvented as office spaces designed to attract international fashion brands, financial powerhouses and technology firms.
Having signed over 178,000 s/f of new leases since the announcement of the building’s repositioning less than a year ago, Marx Realty saw the potential in bringing new life to the upper floor spaces considering the views, potential for 20-ft. ceiling heights and outdoor terrace spaces.
“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.”
The Penthouse Collection experience begins with private elevators from the recently redesigned and relocated lobby at 10 Grand Central, which boasts a uniformed doorman, oversized walnut wood doors and a signature scent that is diffused throughout the building. Each suite will feature rich walnut wood finishes, herringbone hardwood floors and a private bar and café combined with upscale touches reminiscent of the most exclusive members-only clubs.
The upper-most floors – 35 and 36 – will be connected with a grand staircase fashioned in walnut wood and polished stone for a combined total of 10,000 s/f and will offer a 3,500 s/f sky garden terrace on the east side and a separate 2,400 s/f solarium on the west side. Ceiling heights of 20 ft. give way to floor-to-ceiling windows that offer in-your-face views of the Chrysler Building and the surrounding architecture of Midtown East while a library wall adds a literary flair to the space. A fireplace and bar round out the offerings on the 36thfloor. On the 32nd and 33rd floors, Marx Realty will outfit 5,000 s/f, single-floor spaces with the finest finishes in line with the hospitality aesthetic of the building. These floors can be leased individually by separate firms or joined by a staircase to create a duplex office experience for a single user.
“This penthouse experience will be like nothing else in the New York market,” said Deitelzweig. “10 Grand Central and its game-changing hospitality aesthetic is well-known and we’re taking it up a notch with The Penthouse Collection. We’re fielding inquiries on a daily basis from some of the most elite firms in the country.”
The reveal of The Penthouse Collection comes on the heels of Marx Realty’s $48 million repositioning which includes a redesigned and relocated four-story entry portal and marquee and the addition of a seventh-floor lounge, café, terrace, and 40-seat conference space at the 36-story Ely Jacques-Kahn designed office tower. In addition, the repositioning included a new façade with a soaring marquee featuring brass fins. The accents and finishes from the lobby evoke a high-end hotel vibe that continues with a suite of hospitality-styled amenities on the seventh floor. The indoor/outdoor café and lounge boasts a confluence of 7,500 square feet of hospitality-styled amenities including a well-appointed lounge with ample seating and a café, a conference facility seating 40 and The Ivy Terrace, an inviting outdoor space reminiscent of a 1930s era garden party.
The redesign was led by a Marx interior design team and David Burns, principal of Studios Architecture. JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer are leading a team handling the leasing for Marx Realty.
Marx Realty most recently signed Goldman Sachs-backed Crux Informatics to a 10-year full-floor lease at 10 Grand Central. High-profile tenants also include Dwayne “The Rock” Johnson’s production company, Seven Bucks Productions (as reported by the NYPost.com); insurance giant MassMutual, international news agency Agence France-Presse; UK-based sports private equity firm 23 Capital; asset management firm Everside Capital Partners; and, educational technology company Decoded. They join investment firm Benenson Capital Partners; Dennis Publishing’s The Week; and advertising association powerhouse ANA.
Owners Magazine 2019: Talking With the Top Developers and Owners of NYCBY THE EDITORS | NOVEMBER 5, 2019 9:00 AM
Craig Deitelzweig
President and CEO, Marx Realty
Which commercial lease was your biggest win this year? Although not our largest lease, the roughly 60,000-square-foot lease expansion, extension and relocation by ANA at 10 Grand Central was our most impactful as it freed up the top four floors of the building. These floors are now part of our ridiculously high-end Penthouse Collection, with private outdoor space, direct, in-your-face views of the Chrysler Building and soaring, 20-foot ceilings. We anticipate achieving some of the highest rents in Midtown for this space.
Do you think we’re heading into a downturn? Why or why not? All of our indicators show that the New York City market is as strong as ever and our portfolio has never been busier. Likewise, the commercial real estate markets in cities like Atlanta and D.C. continue to show steady growth.
What do you think the future looks like for WeWork and other coworking operators if the economy slows down? These coworking groups will perform poorly during a recession. They have performed poorly during past recessions and the durational mismatch inherent in their business model persists today. The challenges that I have seen are that they expanded far too fast and along the way they were able to convince some of the market players that having a location in their building was a benefit to the landlord and other tenants. I don’t believe that outsourcing culture and community is ever a good idea, so at Marx we create hospitality-like experiences and dramatic spaces specially tailored for our tenants and all the while reinforcing the building’s unique brand and heritage.
Is New York City losing its shine? Are property investors starting to look elsewhere? New York is one of the strongest and most dynamic office markets in the world and continues to improve with the explosion of technology companies locating and expanding here. New York will remain a prime and stable choice for investors.
How have you adjusted your business plan since the new rent laws were passed? Thankfully, we do not have multifamily assets in New York.
Do the new rent laws present any opportunities for savvy owners? Nothing good will come out of these regulations. The biggest concern to New York today is the increasing burdens that these ever-expanding regulations pose on the local economy.
Is REBNY in need of a revamp? What needs to happen? REBNY continues to do a great job educating the public on the impacts of over-regulation on the economy. We all need to work together to help prevent another Amazon debacle from reoccurring. [It’s] hard to understand how well-paying and “new economy” jobs in Queens (my hometown) were somehow considered a bad thing.
What’s the biggest headache in your job that no one knows about? We have been credited with being the first to truly marry office and hospitality and reinvent the office product. As a result, our buildings have doormen outside; music in our lobbies; a signature scent being diffused through the HVAC system; and a club floor with a lounge, high-end cafe and beautifully landscaped outdoor terraces. Overall, the biggest challenge we address every day is that details matter. We make sure all of our tenants and guests are properly welcomed, so our front-of-house associates undergo rigorous training to ensure that everyone performs the Marx way of treating our tenants. Our goal is to perfect the art of making our tenants feel special at “hello.”
What’s more important: having the best lawyer or having the best accountant? I’m a former Skadden lawyer, so I understand the incredible value a sharp lawyer provides.
Most underrated neighborhood in the city? Midtown East. It is by far the most transportation convenient and offers the most diverse talent pool in the entire city. The restaurants, fitness venues and services available make it a great location for finance, tech, legal and creative firms. In the past, any landlord who owned an office building near Grand Central barely had to lift a finger to be successful. The tenants came to them. Now, with new building stock being built on the west side, many of the buildings in the Midtown East market need to be reimagined. Landlords content with the success of the past will fall further behind while creative owners will continue to thrive. We are actively pursuing acquisitions of these types of assets in Midtown.
If you could pick the Republican and Democratic nominees for President, who would they be? Lyndon Johnson versus Ronald Reagan.
LIGHTNING ROUND:
Favorite book? I love reading biographies of visionaries and industry titans.
Too many to pick just one.
Favorite restaurant? Serendipity 3. We have enjoyed a delicious sundae celebration for every one of my kids’ birthdays.
Favorite vacation spot? We’re heading to Australia this winter and I already know it will be our best vacation!
Favorite TV show? “Succession,” even though I try to raise my kids to be the complete opposite of those kids
Favorite movie? “Scarface.” Queens was a pretty rough place when I was growing up so this reminds me a bit of my childhood.
Favorite sport? Baseball. The Mets are my favorite (and most heartbreaking) team by far. Next year is our year.
Marx making a Grand statement with luxury penthouse officesby REW | October 24, 2019
Marx Realty (MNPP) announced it will transform the top five floors at its 10 Grand Central office tower into a suite of penthouse offices.
Dubbed The Penthouse Collection, the offices can be configured as 5,000 s/f single-floor leases or combined into a 10,000 s/f duplex space or a 15,000 s/f triplex office.
The spaces on floors 32-36 will be reinvented as “uber-luxe office spaces” designed to attract international fashion brands, financial powerhouses and technology firms.
Having signed over 178,000 s/f of new leases since the announcement of the building’s repositioning less than a year ago, Marx Realty CEO Craig Deitelzweig said the company saw the potential to bring new life to the upper floor spaces
“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 Deitelzweig.
The Penthouse Collection offers private elevators from the recently redesigned lobby at 10 Grand Central. Each suite will feature walnut wood finishes, herringbone hardwood floors and a private bar and café.
The upper-most floors – 35 and 36 – will be connected with a grand staircase fashioned in walnut wood and polished stone for a combined total of 10,000 s/f of space and will offer a 3,500 s/f sky garden terrace on the east side and a separate 2,400 s/f solarium on the west side.
Ceiling heights are 20 feet and floor-to-ceiling windows offer birds eye views of the Chrysler Building.
A fireplace and bar round out the offerings on the 36th floor. On the 32nd and 33rd floors, Marx Realty will outfit 5,000 s/f single-floor spaces that can be leased individually by separate firms or joined by a staircase to create a duplex office experience for a single user.
“This penthouse experience will be like nothing else in the New York market,” added Deitelzweig. “10 Grand Central and its game-changing hospitality aesthetic is well-known and we’re taking it up a notch with The Penthouse Collection. We’re fielding inquiries on a daily basis from some of the most elite firms in the country.”
Marx Realty has spent $48 million repositioning the entire property to include a four-story entry, seventh-floor lounge, café, terrace, and 40-seat conference space.
The redesign was led by a Marx interior design team and David Burns, principal of Studios Architecture.
JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer are leading a team handling the leasing. The asking rents for the penthouses is $130 psf.
Marx Unveils Plans for Penthouses at 10 Grand CentralOctober 21, 2019
Marx Realty will transform the top five floors at its 10 Grand Central office tower into a suite of penthouse offices, with asking rents of $130 per square foot. They can be configured as 5,000-square-foot single-floor leases or combined into a 10,000-square-foot duplex space or 15,000-square-foot triplex.
The Penthouse Collection at 10 Grand Central will include private elevators from the tower’s redesigned lobby. A grand staircase will connect the two uppermost floors.
“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. “This penthouse experience will be like nothing else in the New York market.”
The company has signed more than 178,000 square feet of leases since unveiling its $48-million repositioning of the 36-story tower. JLL’s Cynthia Wasserberger, Sam Seiler, David Kleiner and Carlee Palmer handle leasing.
545 Madison Avenue: City Council approves Rikers planBy Janaki Chadha | 10/18/2019 10:01 AM EDT
BOOTED OUT — “Thor Equities loses Madison Avenue building,” by Crain’s Daniel Geiger: “It’s over for Joe Sitt at 545 Madison Ave. The landlord behind Thor Equities, who controlled the 17-story, 140,000- square-foot office and retail building through a ground lease, was booted Tuesday as the building’s operator, losing his multimillion-dollar investment in the property in the process. Marx Realty, the building’s underlying owner, is taking it over and renovating it in the style of other successful property makeovers it has completed in recent years.
Thor Equities loses 545 Madison Avenue‘We want to infuse this building with the kind of hospitality vibe that we have done in our other buildings,’ said Craig Deitelzweig, president and CEO of Marx Realty.”
Marx Realty is taking control of the asset with plans for $10M renovation
TRD New York Staff | October 17, 2019 05:00 PM
Joe Sitt has officially left the building.
Sitt’s Thor Equities was evicted from its ground lease at 545 Madison Avenue earlier this week, Crain’s reported. Marx Realty, owner of the land underneath the building, is now assuming control of the 140,000- square-foot building and planning to conduct a $10 million renovation.
Marx president and CEO Craig Deitelzweig said he expects the office and retail space to be full leased by 2021. Marx has been trying to evict Thor since July over $554,583 in unpaid rent and $1.6 million in outstanding real estate taxes.
Trouble began earlier this year after Thor’s ground rent rose by $450,000. The firm struggled to cover its payments on a $30 million CMBS loan from Barclays on the property and it was sent to special servicing for “severe cash flow issues.”
Thor’s eviction wipes out the Barclays loan and a mezzanine loan of about $5 million from Waterman Interests.
Thor Equities loses Madison Avenue buildingMarx told Crain’s the situation put “a real strain on the building.”
“Given the situation, they weren’t doing anything to enhance the building. We’ve met with all the tenants and let them know we’re going to do the right thing for the property,” he continued. [Crain’s] — Erin Hudson
Daniel Geiger | October 17, 2019 02:05 PM
It’s over for Joe Sitt at 545 Madison Ave.
The landlord behind Thor Equities, who controlled the 17-story, 140,000- square-foot office and retail building through a ground lease, was booted Tuesday as the building’s operator, losing his multimillion-dollar investment in the property in the process.
Marx Realty, the building’s underlying owner, is taking it over and renovating it in the style of other successful property makeovers it has completed in recent years.
“We want to infuse this building with the kind of hospitality vibe that we have done in our other buildings,” said Craig Deitelzweig, president and CEO of Marx Realty. “It’s such a great boutique, clublike building to begin with. We’re going to enhance that.”
Deitelzweig said the firm likely will spend $10 million on upgrades in the coming months. He added that he expects the building, where vacancies grew under Sitt’s management, to be full again by early 2021.
Marx Realty completed a similar turnaround of 708 Third Ave., a 1931-vintage building it owns at East 44th Street. Marx rebranded the building under the moniker 10 Grand Central last year. With that new address, Marx renovated it and added hotel-like amenities including a concierge, a doorman-serviced entrance, a lounge and an outdoor terrace for tenants. There’s even a soundtrack and signature scent in common areas.
The building is now fetching some of the highest rents on Third Avenue, in the $80s per square foot and beyond. Rents on Third Avenue typically top out in the $70 range.
“I think that Marx is really good at knowing what today’s tenants are looking for,” Deitelzweig said.
In 2013 Sitt’s real estate firm paid $53 million for the ground lease at 545 Madison Ave., according to property records. A ground lease allows an investor to run a property. As 545 Madison Ave. lost tenants, however, Thor fell behind on its ground rent. And in July, Marx began eviction proceedings against the firm in Civil Court.
In total, Thor failed to pay more than half a million dollars in rent, Marx Realty claimed, and it accrued $1.6 million in unpaid real estate taxes to the city, another breach of its ground lease.
Thor’s lenders also were hurt financially by the investment. Thor had a $30 million securitized mortgage serviced by LNR that was wiped out by the eviction. Another real estate investment firm, Waterman Interests, extended Thor a roughly $5 million mezzanine loan on the property that also now will go unpaid because of the eviction.
Deitelzweig said Thor had poorly managed the property in recent months as it began to sense the building was slipping away.
“It’s a real strain on the building to go through that,” he said. “Given the situation, they weren’t doing anything to enhance the building. We’ve met with all the tenants and let them know we’re going to do the right thing for the property.”
Thor declined to comment.
Office building rooftops, terraces are multiplying with a vengeanceBy Steve Cuozzo | October 7, 2019 | 10:55pm
Two years after the Department of Buildings tried to ban them, office building rooftops and terraces — today’s hottest tenant amenities — are multiplying with a vengeance.
The great outdoors is the new frontier in Manhattan office-building design. Developers are including alfresco terraces and roof spaces in just about every new project, while owners of older properties are spinning them out of thin air.
Relatively cheap to install, the outdoor spaces are what many tenants want most, says CBRE Vice Chairman Howard Fiddle. Floors with terraces now command a 14% premium over non-terrace floors — with average taking rents of $105.35 a square foot clobbering taking rents of $92.34 in buildings surveyed by CBRE.
Nine of 10 new buildings now under construction — including mighty One Vanderbilt and most of the Hudson Yards towers — feature outdoor space, according to CBRE. From 2000 to 2009, by comparison, only six of 17 new projects included outdoor space, while old buildings with airy space were few and far between.
The DOB in 2017 tried to ban office terraces on “safety” grounds — a bizarre campaign that threatened to sabotage such major terrace-equipped projects as Three World Trade Center and Four Times Square — until stories by The Post prompted the DOB to back off.
Creative and tech firms with many millennial-age employes are especially enamored of outdoor extras, Fiddle said. “They’re happy to be outdoors even in winter,” he said. But the trend appeals to traditional financial firms as well.
Fiddle cites 1633 Broadway, for which CBRE is the leasing agent. The tower had two top floors of 50,000 square feet each coming available.
The skyscraper had no terraces. But landlord Paramount “came up with the concept of a double-height terrace on the southwest side,” Fiddle said. The so-called “inboard terrace” didn’t involve building an outdoor deck but rather merely opening part of previously enclosed office space to the air.
Fiddle believes the terrace, which is now under construction, was an important factor in private equity firm New Mountain Capital’s recent decision to move there from 787 Seventh Ave.
“I don’t think this tenant would have landed at 1633 Broadway had it not been for the terrace,” Fiddle said.
Most landlords are delighted to install terraces and roof gardens because they generally don’t add to the building’s square footage that’s counted for zoning purposes, as long as they’re unenclosed.
They’re becoming standard equipment at new projects in every part of Manhattan.
For example, Related Companies tweaked its original design for 10 Hudson Yards — which was the first office tower to go up at the complex — to create terraces for major tenants L’Oreal, Coach and SAP.
KKR will have a terrace at 30 Hudson Yards, as will Milbank Tweed, Silver Lake and Point72 at 55 HY. A series of cascading landscaped terraces is an integral element of Tishman Speyer’s The Spiral just north of Related’s complex.
Realty Check is often asked to scope out capital upgrades being made to older properties. But in the past few years, what landlords really wanted us to see wasn’t new lobbies and elevators, but rooftops (at Aby Rosen’s 345 Park Avenue South) and terraces (at Rosen’s Seagram Building at 375 Park Ave.) and at Marx Realty’s 10 Grand Central.
Marx’s 1931-vintage building on Third Avenue at East 44th Street had a feature common to “wedding cake”-style architecture — a slew of outdoor setback terraces, 46 of them exactly. They were used for mechanical equipment or for nothing at all, until Marx saw gold in them.
“We activated about 24 of them” for tenant use, Marx CEO Craig Deitelzweig said. He also created two new penthouse terraces at the top.
A seventh-floor terrace is available to all tenants, and “that alone created a buzz for the whole building,” he said.
The rest are for use by a single tenant. Among them: data engineering firm Crux, which recently moved to 10 Grand Central. Its 18,000-square-foot lease on the 18th floor comes with a bonus of outdoor space of about 2,500 square feet.
“They wanted to be engaged with the outdoors,” Deitelzweig said. “It was their No. 1 priority.”
Other older properties that received or are getting the terrace treatment include L&L Holding’s 390 Madison Ave. and Tishman Speyer’s Morgan North Post Office.
And, as The Post’s Lois Weiss reported earlier, Vornado’s Farley Building at the former post office site between Eighth and Ninth avenues, which is described as “best-in-class creative office hub,” will boast a nearly 70,000-square-foot “park” on the roof “to inspire tenants to interact with nature and to encourage movement, wellness and fitness,” as Vornado’s website put it.
CPE Announces the Distinguished Achievement Award WinnersThe annual awards program honors the industry’s outstanding transactions, projects and people.
By the Editors of Commercial Property Executive | October 4, 2019
Commercial Property Executive and Multi-Housing News hosted a joint reception on Thursday evening to honor the winners of the 2019 CPE Distinguished Achievement Awards and MHN Excellence Awards. The event was held at 10 Grand Central in New York City.
Now in their ninth year, the CPE Distinguished Achievement Awards recognize the year’s top deals, projects and future leaders. Entries were judged by a distinguished panel of senior industry professionals:
REPOSITIONING/REDEVELOPMENT
Honorable Mention: 10 Grand Central
- Location: 155 E. 44th, New York City
- Owner/investor(s): Marx Realty
- Developer: Marx Realty
- Architect: Studios Architecture
- Property type: Office
- Total size of property: 500,000 square feet
- Rent range before repositioning: $44 per square foot; after repositioning, $72-$120 per square foot