Crain's New York Business, February 19, 2007

Copyright 2007 Crain Communications

All Rights Reserved

Crain's New York Business

February 19, 2007

SECTION: REAL ESTATE REPORT; Pg. 34

HEADLINE: Two nonprofits are moving up to midtown site;

Family Center, Dieu Donne head to West 36th; SoHo condo to house furniture store

BODY:

At a time when many nonprofits are fleeing the high prices of midtown for more reasonable rents in lower Manhattan, two others are making the reverse trip. The Family Center, which provides counseling to children whose parents have died of serious illnesses, and Dieu Donne Papermill, a workspace for artists, are leasing a total of 19,000 square feet at 315 W. 36th St., between Eighth and Ninth avenues.

The Family Center has signed a 10-year deal for 14,000 square feet, or the building's entire fourth floor. The asking rent for the space was $29 a square foot. The nonprofit is relocating from 11,000 square feet at 66 Reade St., which is being converted into a residential building.

Dieu Donne Papermill has signed a 15-year lease for 7,300 square feet on the mezzanine and ground floor and in the basement. The asking rent for the space, which boasts 24-foot ceilings, was $45 a square foot. Dieu Donne Papermill is relocating from a 5,000-square-foot space at 443 Broome St.

``Dieu Donne Papermill couldn't find the kind of space they were looking for--high ceilings and on the ground floor--in the Wall Street area,'' says Carri Lyon, a broker at Cushman & Wakefield Inc., who represented both Dieu Donne Papermill and the Family Center in their leases.

For its part, the Family Center had been spread across several floors at its old location, and its new office will be consolidated on a single floor. Another plus was the building's proximity to the transportation hubs at Port Authority Bus Terminal and Pennsylvania Station, Ms. Lyon adds.

Among other tenants at 315 W. 36th St. is Teach for America, whose headquarters are in the building.

--julie satow

Furniture maker opening SoHo store

a furniture maker that has 12 stores outside New York City and sells products through ABC Carpet & Home, Crate & Barrel, Restoration Hardware and other locations is opening its first store in the city. Mitchell Gold + Bob Williams signed a 12,000-square-foot lease at 210 Lafayette St., a condominium development between Broome and Spring streets.

The 10-year lease is for 8,000 square feet on the ground floor and 4,000 square feet in the basement. The asking rent was $125 for the ground floor and $30 a square foot for the basement.

The store provides ``highly visible frontage on two of SoHo's most popular walkways,'' says David Tricarico, a retail broker at Cushman & Wakefield, who represented landlord Cape Advisors. The store also provides the tenant ``with ample space to showcase their designs, as well as a built-in client base in the 40-plus luxury residential units directly above them.'' Robert K. Futterman & Associates represented the tenant.

--julie satow

Growing U.K. firm takes NYC space

a british corporate services company is growing its presence in the United States, hiring more than 600 employees and expanding its headquarters. HRG North America, a subsidiary of Hogg Robinson Group, has leased an additional 11,000 square feet for a total of 28,000 square feet at 16 E. 34th St., between Madison and Fifth avenues. The asking rent in the building is $40 a square foot.

``We are experiencing tremendous growth and may need to further expand our headquarters in the future,'' says Richard Butterworth, an executive vice president at HRG North America. The company will move into its new office space by the end of the first quarter.

The office, located on the entire third floor and most of the 12th floor, will house HRG North America's executive team and also a call center for travel agents who book trips for the company's clients.

``They expanded onto the 12th floor and extended their lease on the third floor, and both leases will run for 10 years,'' says Jim Frederick, a broker at Colliers ABR, who represented the tenant. Landlord SL Green Realty Corp. represented itself on the transaction.

Other tenants in the building include Cornell University's School of Industrial and Labor Relations, Sara Lee Corp. and Reader's Digest.

--julie satow

Furnishings store adding downtown

home furnishings retailer Baranzelli Silk Surplus is planning to open its first downtown Manhattan location at 32 N. Moore St., between Hudson and Varick streets.

The company, which has long operated a store on the east side of midtown, signed a five-year lease for the 1,000-square-foot TriBeCa shop. Baranzelli also runs stores in Boston and West Palm Beach, Fla.

The family-owned chain started in 1961 as an outlet for fabric and furniture trimmings. It has revenue of about $3.5 million a year. Owner Edwin W. Bitter II plans to open stores in other cities and hopes to increase sales to $5 million by 2009.

Buchbinder & Warren Realty Group negotiated the downtown deal for Baranzelli. ``TriBeCa is right for them because there are lots of home furnishings stores in the neighborhood,'' says Gabe Whitman, a Buchbinder broker who worked on the deal. The asking rent was about $90 per square foot.

Property owner M. Blaustein & Son Inc. chose Baranzelli over a plethora of food vendors that also wanted the space.

``We had so many people coming for coffee shops, food uses, even a chocolate shop,'' explains Elliott Dweck, a Besen Retail broker who represented Blaustein in the deal. ``But we needed a dry use.''

--elisabeth butler

Union buys into office condo

a labor union has bought an 8,000-square-foot office condominium at 125 Maiden Lane. The Civil Service Employees Association is relocating from 40 Fulton St. to the building, one of the few office condos in lower Manhattan. The asking price for space in the building is $450 a square foot.

``It is a great long-term investment that dramatically increases our organization's equity,'' says Alan Jennings, the regional director of the union, in a statement.

The Civil Service Employees Association is the latest organization to buy at 125 Maiden Lane, joining the Empire State Development Corp.

Time Equities Inc., which converted the building into office condos last year, has sold 190,000 square feet at the building for more than $70 million.

``There is pent-up demand for this product,'' says Michael Rudder, the director of office leasing and sales at Time Equities. CB Richard Ellis represented the buyer.

Office condos are attractive to government tenants and nonprofits, which don't have to pay property taxes when they buy one. The tax savings can amount to as much as $6 a square foot per year.

``With such low vacancy rates and rents spiking, it is difficult in this market for a tenant,'' Mr. Rudder says. ``An office condominium gives a tenant control over its future and enables it to predict costs.''

Time Equities is not selling all of the available space at 125 Maiden Lane. The developer will continue to own 160,000 square feet of the 350,000-square-foot building, leasing its space to commercial tenants.

--julie satow

GRAPHIC: Art Credit: 315 W. 36th ST. is the new location for a counseling service and an artists' workspace. * 32 N. MOORE ST. will have a Baranzelli Silk Surplus store as a new tenant. * 125 MAIDEN LANE will house a union office.