Renovated office towers are about to transform Third Avenue
By 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.”View the Full Article