Midtown South March Madness: 300,000+ SF of Leases Reportedly in the Works or Completed

I tend to keep my reporting of Midtown South leasing activity to the Friday column. However, there have been enough noteworthy transactions, both confirmed and rumored, popping up in the real estate press the past few days that a mid-week exception seems warranted. And as someone who has been overly vocal about my belief that the Midtown South market will emerge from its malaise much sooner than others have predicted, I am a little anxious to spread word of positive news.

Let’s start with the confirmed. The New York School of Interior Design has signed a 20-year lease according to Crain’s New York Business for 40,000 RSF on the entire 2nd and 3rd floors at 401 Park Avenue South. The asking rent for the space was reportedly $45.00 PRSF. The facility will serve as the school’s graduate center and will be able to accommodate up to 209 students. LEED Gold certification will be pursued for the space, which the school hopes to partially occupy by this fall, with full occupancy planned by February 2011. The nonprofit school’s headquarters location will remain on the Upper East Side.

At 333 West 34th Street, the Metropolitan Transit Authority signed a 112,940 RSF lease, per the New York Post. The asking price for the space was $42.00 PRSF. A few interesting things about that lease:
- The MTA reportedly has an out clause it can exercise in the 4th or 7th years of the lease
- The MTA is exempt from paying real estate taxes on this space as a result of a law that relieves government agencies from real estate tax payments when they lease a block of space as a separate tax lot. Building owner SL Green had previously structured the building as two separate tax lots, and the MTA is the beneficiary. SL Green is the biggest landlord in Manhattan and arguably the shrewdest landlord in Manhattan - they almost always position themselves in the most advantageous positions and almost never miss a trick.

Now for the rumors, all of which I saw in the usually reliable Real Estate Weekly.
- Publicis Modem, the digital advertising subsidiary of Publicis Groupe, is reportedly close to a deal to relocate from 22,000 RSF at 75 Ninth Avenue to more than 50,000 RSF of offices being sublet by CBS College Sports Television at 85 Tenth Avenue.
- The City University of New York is said to be in talks to lease more than 130,000 RSF at 395 Hudson Square, with sources telling Real Estate Weekly that the school will use the space to relocate some of its operations from 555 West 57th Street, including a data center facility.