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August 3, 2023
J. HUGHES | MARIO MARROQUIN | EDDIE SMALL
Leases
Gutter protection company inks lease for marketing headquarters in Midtown
Address: 10 Grand Central, Manhattan
Landlord: Marx Realty
Tenant: LeafHome
Lease size: 10,000 square feet
Lease length: 5.5 years
Asking rent: $92 per square foot
Asset type: Office
Brokers: CBRE’s Maxwell Tarter represented the tenant, and JLL’s Mitchell Konsker, Kyle Young, Carlee Palmer, Simon Landman and Thomas Swartz represented the landlord.
August 3, 2023
By Julian Nazar – Staff Reporter, New York Business Journal
Leaf Home, a Hudson, Ohio-based provider of home improvement products, will be opening its first New York City office at Midtown office tower 10 Grand Central in September.
This deal continues the strong leasing momentum at Marx Realty’s office property.
In the past year, more than 90,000 square feet of ground-floor retail and office space has been leased at 10 Grand Central.
“We have seen more activity in terms of leasing and tours than any other property in the Grand Central neighborhood,” Marx Realty’s CEO and President Craig Deitelzweig said in a statement. “The leasing velocity around 10 Grand Central has remained steady during the current office cycle due to the highly differentiated product offering here and across our portfolio.”
Notable amenities at the property include a 7,500-square-foot indoor/outdoor lounge and club floor with an outdoor space called “the Ivy Terrace” as well as a luxury electric Porsche Taycan that tenants can use for transportation around Manhattan.
Leaf Home is the latest company to be attracted by the amenity offerings.
The company will occupy 10,000 square feet in a pre-built space on the 15th floor of the building that includes four private outdoor terraces.
The lease is for five-and-a-half years and asking rent was $92 per square foot.
The space will serve as headquarters for Leaf Home’s marketing operations. The company is known for its LeafFilter gutter protection technology.
Leaf Home was represented by CBRE’s Maxwell Tarter on the deal. Marx Realty was represented by JLL’s Mitchell Konsker, Kyle Young, Carlee Palmer, Simon Landmann and Thomas Swartz.
Asking rents at the Midtown office tower range between $68 and $120 per square foot.
LeafHome Inks 10K-SF Lease at 10 Grand Central
New York & Tri-State + Midtown New York + Retail
By: Emily Fu | August 3, 2023
Marx Realty, a New York-based property firm, has announced that LeafHome, an Ohio-based developer of LeafFilter gutter protection technology, has signed a long-term lease for a 10,000-square-foot space at 10 Grand Central in Manhattan. The space, located on the 15th floor, will serve as LeafHome’s first New York City office and its marketing headquarters.
“We have seen more activity in terms of leasing and tours than any other office property in the Grand Central neighborhood,” said Craig Deitelzweig, president and CEO of Marx Realty.
The asking rent was $92 per square foot and LeafHome was represented by Maxwell Tarter of CBRE. Marx Realty was represented by JLL’s Mitchell Konsker, Kyle Young, Carlee Palmer, Simon Landman and Thomas Swartz. Asking rents at 10 Grand Central range between $68 and $120 per square foot.
Arctaris Impact Investors Opens $152M Northeast Heights Opportunity Zone Office Project in Washington, D.C.
July 28, 2023 | Channing Hamilton
WASHINGTON, D.C. — Arctaris Impact Investors LLC has completed Phase I of Northeast Heights, a six-story, 281,000-square-foot office building in Ward 7 of Washington, D.C. The office building is located in a Qualified Opportunity Zone, which is an economically distressed area where new investments may be eligible for preferential tax treatment.
The office building is the first phase of a three-phase, $600 million effort to revitalize Ward 7, according to Arctaris’ website. Future phases of Northeast Heights are expected to include a grocery store redevelopment, approximately 1,300 residential units and community spaces.
According to Arctaris, the project was catalyzed by D.C. Mayor Muriel Bowser’s mandate for city agencies to use the leasing power of the D.C. government to encourage economic development in historically underserved communities. Northeast Heights was pre-leased to the city’s Department of General Services and will serve as the new headquarters for the agency, which employs approximately 700 people. The Department of General Services was the first city agency to sign a contract for office space east of the Anacostia River under this initiative.
“Arctaris is proud to be part of the coalition led by Mayor Bowser, combining forces with like-minded, community-oriented investors to help bring new vitality and economic activity into Ward 7,” says Ben Bornstein, managing director of Arctaris. “We hope to participate in further investment in Wards 7 and 8 to benefit residents and strive toward a more equitably served city with greater opportunity for all community members.”
Arctaris developed the building in partnership with Asland Capital Partners, a minority-owned private real estate investment firm based in New York City, as well as the Urban Investment Group within Goldman Sachs Asset Management.
Erie Insurance invested in the project as part of a $20.5 million commitment to Arctaris to fund companies and development projects in opportunity zones. Erie and Arctaris have previously partnered on projects in Baltimore, Pittsburgh, D.C. and the insurance company’s hometown of Erie, Pennsylvania.
Marx Realty Unveils Dramatic Penthouse Renderings, Secures Lease Extension at 545 Madison
GTS Securities Signs Two-Year Extension for 30,000-Square-Foot Space at Repositioned Office Tower in Manhattan’s Plaza District
July 25, 2023
Marx Realty (MNPP), a New York-based owner, developer and manager of office, retail and multifamily property across the United States, announced the unveiling of 545 Madison’s luxury penthouse renovation renderings. Additionally, GTS Securities has signed a two-year lease extension for its 30,094-square-foot space, distributed across the building’s 9th, 15th, 16th, and 17th floors. GTS worked with the landlord on the lease extension, without a broker.
The penthouse renovation currently underway is another example of the successful repositioning strategy at 545 Madison. The high-end penthouse design marks the final piece of the comprehensive top-to-bottom renovation at 545 Madison. The glass walls on the top floor will slide to allow a complete indoor/outdoor experience, overlooking an oversized terrace on the top floor of the building. Additionally, a stunning, light-filled staircase connects the two-story space. The space becomes available in January of 2024 at an asking rent of $130 per square foot, underscoring the immense desirability of the building.
“Our reimagining of the penthouse space at 545 Madison extends the building’s extraordinary transformation, offering an unparalleled office experience for the most discerning office users,” said Craig Deitelzweig, president and CEO of Marx Realty. “The ongoing leasing activity at 545 Madison is a testament to our ability to attract top-tier tenants, thanks to our proven hospitality-infused repositioning strategy. With an ambiance that rivals the most opulent penthouse suites in luxury hotels, 545 Madison’s penthouse sets a new standard, elevating the workspace experience to new heights. We are seeing incredible interest in the new space.”
The company recently unveiled the Leonard Lounge, a remarkable 7,000-square-foot space encompassing a café, a picturesque 2,000-square-foot landscape terrace, and a sophisticated 40-seat boardroom. The lounge is reminiscent of an exclusive members-only club and is aptly named in memory of Leonard Marx, the founder of Marx Realty. The new space offers an array of elegant features, including a ceiling suspended fireplace, a well-appointed café with a large center island, and a variety of plush velvet seating to create a rare and sophisticated ambiance. Whether users seek a bespoke workspace beyond the conventional office environment or a cozy nook to unwind with a cocktail after a long day, the Leonard Lounge offers tenants a serene and elegant workspace option.
In addition, the building’s entrance and lobby have undergone a complete transformation, featuring a uniformed doorman at the entry, and embracing warm materials and gentle curves in the redesigned lobby. With refined mood music, soothing lighting, and a signature scent, the new lobby exudes a welcoming ambiance akin to the world’s finest hotel lobbies. Tenants and guests also enjoy access to a well-stocked library, further enhancing the hotel-like experience.
In line with Marx Realty’s commitment to the environment, the company pledges to plant three trees in the local community for every lease signed across its office properties. This initiative is just one of many ways in which Marx Realty gives back to the community and ensures sustainability throughout its properties. By continuing this tradition, Marx Realty is helping promote healthier and more vibrant communities for all.
Financial software and applications developer Strike Technologies was the first to sign at 545 Madison soon after Marx took over and presented its plans for the building. Other notable tenants include private equity firm Snow Phipps, Vialto Partners (a spinoff of Price Waterhouse Coopers), Qurate Retail Group (formerly HSN), Ogden Capital, Corniche Growth Advisors, Helix Partners Management, as well as additional top-tier wealth management and private equity firms.
July 25, 2023
TOP LEASES
Capital markets company GTS is staying put at Marx Realty’s 545 Madison Ave., Commercial Observer reported. GTS signed a two-year lease extension for its 30K SF office across four floors of the 17-story property, where the company has had offices for roughly 10 years. Marx Realty has been completing upgrades since partway through the pandemic, which have ushered in lobby renovations, a library and a doorman, in addition to a two-story penthouse due to be completed in January.
GTS Securities Signs 30,094 SF Office Lease Extension at 545 Madison Avenue in ManhattanJuly 28, 2023
NEW YORK CITY — Trading and technology firm GTS Securities has signed a two-year lease extension for its 30,094-square-foot office space at 545 Madison Avenue, a 17-story, 140,000-square-foot building in Manhattan’s Plaza District. The tenant’s footprint includes spaces on the 9th, 15th, 16th and 17th floors of the building, which is owned by Marx Realty. No third-party brokers were involved in the deal. Other tenants at 545 Madison Avenue include private equity firm Snow Phipps and Vialto Partners, a spinoff of PwC.
A top NYC commercial real estate CEO says the buildings hurting from remote work are the same ones he warned about 6 years ago
BY ALENA BOTROS | July 5, 2023
Craig Deitelzweig, chief executive officer of New York based-Marx Realty, says the office sector is “really bifurcated” right now.
Marx Realty has been a player in New York commercial real estate for over 100 years. From its first property purchase in 1915, onto the acquisition of 17 properties in 1928, its holdings now encompass 67 properties across 17 states, so it’s seen several turns in the commercial real estate market. To Craig Deitelzweig, president and chief executive officer, one thing is clear about the office sector and it doesn’t solely have to do with the remote work era or the aftermath of the pandemic: “If you’re a commodity building, you’re in deep trouble,” he tells Fortune.
This is “really nothing new,” he adds, saying that he’s been beating this drum for the last six years, ever since he became CEO. “If you’re a commodity building, you’re toast.”
But to understand what Deitelzweig means, you have to know what he means by “commodity building,” and that’s where it gets more complicated. But there’s still one inescapable truth: “the office sector is really bifurcated at the moment.”
With remote work giving way to hybrid giving way to the current push-and-pull to get employees back as much as possible, the way to do that is with an office that makes them want to be there. That means bringing in hospitality elements, Deitelzweig says, adding that his firm’s office properties have outdoor spaces, lounges, cafes, doormen, and of course the thing pretty much everyone loves: free coffee.
“That’s what today’s tenants want,” he says, and that’s why he says Marx Realty’s office properties are well-positioned, and why commodity buildings can’t compete on price because, as he put it, who wants to come into an office with low ceilings and a depressing environment. “You could be a brand-new glass and steel office building and still be commodity—there’s nothing special about it. Some of those buildings have been sold at really steep discounts.”
That’s not to say that office sector is solely at risk. Any asset could be in trouble, Deitelzweig says, if its owner has debt that’s coming due and they bought their property with the assumption that they’d have lower interest rates forever. Now that the Federal Reserve has aggressively raised interest rates in its attempt to lower inflation, and there’s debt set to mature at those higher rates, “that is a real concern for every sector in real estate,” Deitelzweig adds. As Fortune previously reported, commercial real estate loans that are set to mature in a time of higher interest rates and tightened credit (following stress in the banking sector) will likely result in more delinquencies, defaults, and declining property values.
‘No choice but to hand the keys back to the lender’
It’s hard to even ascertain where office property values are right now, Deitelzweig says, because there’s hardly any transactions happening. Part of that is because credit is tightened and stricter lending standards are at play, but also because owners don’t want to give back their properties to lenders. “It takes a while for them to reach that conclusion that this is really the best result for them,” he explains.
The economy has already begun to see how the end of an era of cheap money and changing demand is playing out for office properties, with Fred Cordova, CEO for Santa Monica–based commercial real estate brokerage and consultancy firm Corion Enterprises, telling Fortune that “we’re creating this huge class of zombie buildings.”
For those same reasons, the commercial real estate billionaire (and son of the former presidential candidate) Ross Perot Jr., suggested that “commercial real estate, overall, will slow down,” and potentially head toward a recession—raising a particular concern over New York City’s old office buildings in our post-pandemic world. “It’ll be years before we really understand the damage the pandemic did to the world,” Perot told Fortune, adding that for one, “it broke the habit patterns of millions of people that used to go to work every day in a real office.”
Those commodity buildings, Deitelzweig mentioned, are trading at half their purchase price or even more than that, and the better ones are still declining in value. Still, he says this can present itself as an opportunity for developers that know how to reposition an asset and elevate it to meet today’s tenants’ expectations. But that means that we are seeing office property owners and landlords returning their assets to lenders. “It really has to be twofold,” Deitelzweig says, in that more often than not this is happening with property owners that have debt coming due on their—and they don’t know how to properly reposition it or they don’t want to put in the extra capital that’s needed to make that happen.
“For the assets that aren’t doing well and have debt coming due, I mean, they’ll have no choice but to hand the keys back to the lender, so there will be more of that happening,” Deitelzweig says.
That can mean a few different things for supply. For the commodity types of spaces and buildings, Deitelzweig says there’s already too much supply, so there’s going to have to be some adjustment. Maybe that’s transforming commodity building into hospitality-infused office properties—or maybe tearing them down and turning them into parks (which is exactly what Perot Jr. told Fortune he’d do). Why not convert those obsolete offices to housing, I asked, like many others, thinking it could potentially help the city’s housing crisis.
“On the properties that I’ve looked at, it really doesn’t make economic sense, and it’s more of a pipe dream,” Deitelzweig says. “Because really, if it doesn’t work for office, it doesn’t work for residential, usually, as well, and the basis would have to decrease so dramatically for those economics to make sense.”
Deitelzweig joined the company as its president and CEO back in 2017. His main focus? Value-add office investments in three core markets: New York City, Washington D.C. and Atlanta and repositioning Marx’s entire portfolio. They’ve since adjusted their focus to New York City and Washington D.C., but they still “very much believe in office repositioning.” Deitelzweig tells Fortune that their portfolio (which includes office, retail, and a little bit of residential) is positioned well, with no debt coming due in the next two years. Take Marx Realty’s 10 Grand Central property (a 35-story office building) in New York, Deitelzweig says they’ve leased more space in that building in the last 12 months than all the buildings around them combined.
“Are you trying to get me to give away my secrets?” Deitelzweig said, laughing, after I asked what’s missing. He then said, some of it is location, as in being near transportation, because no one really wants to take that second or third train to work. But it’s also about being thoughtful with your design. The best hotels can’t be replicated, and that’s how they like to think of offices. Nevertheless, for those assets that he mentioned won’t have a choice but to turn in the keys, lenders will look to companies like his for help, which Deitelzweig says is already happening.
Marx Realty signs Helix Partners Management to 7,000 s/f at 545 Madison“I think it’s part of a cycle, and I think it’s a very healthy thing sometimes for every commercial real estate sector to sort of rethink, step back, and reimagine what the product could look like,” Deitelzweig says.
Manhattan, NY Marx Realty (MNPP) said that Helix Partners Management has signed a five-year, 7,000 s/f lease on the 8th floor at 545 Madison. The firm is relocating from 399 Park Ave.
“We are excited to have Helix Partners join the impressive lineup of top-tier financial companies at 545 Madison,” said Marx Realty’s president and CEO, Craig Deitelzweig. “This lease comes just weeks after we unveiled the Leonard Lounge – a spacious lounge on the same floor complete with a café, fireplace, landscaped terrace, and boardroom.”
Helix Partners was represented by Greg Maurer-Hollaender of CBRE, while a Cushman & Wakefield team led by Tara Stacom represented Marx Realty.
Marx Realty infused the spaces at 545 Madison with its signature hospitality aesthetic, resulting in a remarkable transformation. The $24 million project went beyond superficial changes, essentially creating a home-away-from-home experience in the office. The one-of-a-kind strategy set a new industry standard, catering to the demand for high-quality office spaces. As a result, Marx Realty has achieved higher occupancy rates, increased asking rents, and attracted a prestigious tenant mix.
“Helix Partners was particularly attracted to the well-appointed pre-built suites at 545 Madison as well as the elegant and elevated environment that the property offers to their employees and guests,” said Deitelzweig.
The recently unveiled Leonard Lounge represents the culmination of 545 Madison’s top-to-bottom renovation. Spanning 7,000 s/f, this space is composed of three distinct areas: a café, a 2,000 s/f landscaped terrace, and a 40-seat boardroom. The Leonard Lounge is reminiscent of a members-only club and was named after Leonard Marx, the founder of Marx Realty. It boasts a variety of elegant features, including a ceiling-suspended fireplace surrounded by velvet seating, which gives the lounge a rare, sophisticated ambiance not often found in traditional office settings. Whether users are looking for a bespoke workspace outside of the usual office environment or a cozy nook to unwind with a cocktail after a long day, the Leonard Lounge provides the perfect respite.
The entrance and lobby of 545 Madison underwent a complete transformation, featuring a uniformed doorman at the entry and warm materials and soft curves in the redesigned lobby. From sophisticated mood music to soothing lighting and a signature scent, the lobby provides a welcoming ambiance reminiscent of the world’s finest hotel lobbies. Tenants and guests also have access to a well-stocked library, adding to the hotel-like experience of the space.
Marx Realty took over the 140,000 s/f 18-story office tower in 2019 with occupancy rates at 68% and the possibility of sinking to 40%. The real estate developer’s strategy managed to turn things around completely; today, the office tower is at almost full capacity. Not only has Marx Realty increased the occupancy rates, but they have also managed to command higher rents for the available spaces. Asking rents now range from $88 to $130 per s/f, a significant jump from prior asking rents ranging from $60 to $70 per s/f. The top penthouse floor will be available next year at an asking rent of $130 per s/f, a testament to the building’s desirability.
As part of Marx Realty’s ongoing commitment to the environment, the company is planting three trees in the local community for each lease signed in any of its office properties. This initiative is just one of many ways in which Marx Realty gives back to the community and ensures sustainability throughout its properties. By continuing this tradition, Marx Realty is helping promote healthier and more vibrant communities for all.
Financial software and applications developer Strike Technologies was the first to sign at 545 Madison soon after Marx took over and presented its plans for the building. Other notable tenants include private equity firm Snow Phipps, Vialto Partners (a spinoff of Price Waterhouse Coopers), Qurate Retail Group (formerly HSN), Ogden Capital, Corniche Growth Advisors, as well as additional top-tier wealth management and private equity firms.
Helix Partners Management Signs at 545 Madison
Marx Realty, a New York-based owner, developer and manager of office, retail and multifamily property across the United States, announced that investment advisory firm Helix Partners Management has signed a five-year, 7,000-square-foot lease on the eighth floor at 545 Madison Ave. The firm is relocating from 399 Park Ave.
“We are excited to have Helix Partners join the impressive lineup of top-tier financial companies at 545 Madison,” said Marx Realty President and CEO Craig Deitelzweig. “This lease comes just weeks after we unveiled the Leonard Lounge, a spacious lounge on the same floor complete with a café, fireplace, landscaped terrace and boardroom.”
Helix Partners was represented by Greg Maurer-Hollaender of CBRE, while a Cushman & Wakefield team led by Tara Stacom represented Marx Realty.
Marx Realty recently completed a $24 million renovation of the property that went beyond superficial changes, essentially creating a home-away-from-home experience in the office. The one-of-a-kind strategy set a new industry standard, catering to the demand for high-quality office spaces. As a result, Marx Realty has achieved higher occupancy rates, increased asking rents and attracted a prestigious tenant mix.
“Helix Partners was particularly attracted to the well-appointed pre-built suites at 545 Madison as well as the elegant and elevated environment that the property offers to their employees and guests,” added Deitelzweig.
The recently unveiled Leonard Lounge represents the culmination of 545 Madison’s top-to-bottom renovation. Spanning 7,000 square feet, this stunning space is composed of three distinct areas: a café, a 2,000-square-foot landscaped terrace and a 40-seat boardroom. The Leonard Lounge is reminiscent of a members-only club and was named after Leonard Marx, the founder of Marx Realty. It boasts a variety of elegant features, including a ceiling-suspended fireplace surrounded by plush velvet seating, which gives the lounge a rare, sophisticated ambiance not often found in traditional office settings. Whether users are looking for a bespoke workspace outside of the usual office environment or a cozy nook to unwind with a cocktail after a long day, the Leonard Lounge provides the perfect respite.