Large office tenants and towers playing high-stakes chess games in Manhattan

Business

property control

Past Steve Cuozzo

April 23, 2023 | 12:57 p.m

Here’s a story of a kind we haven’t written in a while: a large-scale chess game involving the potential moves of two huge corporations and three first-line office towers.

It’s refreshing to learn about big deals that may or may not even happen at a time when the commercial high-end market is mostly stagnant, dominated by renewals and small new leases.

Market sources told us that Paul Weiss, a tenant at RXR Realty and China Life’s 1285 Sixth Avenue for nearly 30 years, is considering moving to a slightly smaller space at Fisher Brothers’ 1345 Sixth Ave. when the lease on 1285 expires at the end of 2026.

The high-powered law firm occupies more than 500,000 square feet at 1285 Sixth.

With an eye on landing Paul Weiss, Fisher has reportedly put a hold on several negotiations with potential tenants at 1345 Sixth to take parts of the former Bernstein floors, which would be used by Paul Weiss. AllianceBernstein moved the bulk of its operations to NashvilleTenn., last year.

Meanwhile, in a separate but related situation, buzz is that UBS — an even bigger tenant at 1285 Sixth than Paul Weiss, with more than 800,000 square feet — is toying with moving large units of Credit Suisse, which UBS recently acquiredfrom SL Green’s 11 Madison Avenue to 1285 Sixth.

Well-placed sources said UBS’s intentions have thrown a wrench into the situation at 1285 Sixth, where its lease runs beyond 2030.

“They want to consolidate the Credit Suisse space. If they can do that at 1285 Sixth, that might motivate Paul Weiss to find a new home because they were looking to expand. But there aren’t many blocks [at other buildings] available in the size it needs,” said an insider.

Another source said Paul Weiss actually preferred to stay at 1285 Sixth if it could grow there, but “The Credit Suisse thing complicated things.”

A SL Green source said that UBS/CS “is far from developing a real estate strategy in relation to 1285 Sixth and 11 Madison. They may not yet have clarity on which CS businesses will be retained or sold and what the final headcount will be.” become. Only after that will they focus on where people will be.”

RXR CEO Scott Rechler declined to comment, as did CBRE’s Peter Turchin, the agent for 1345 Sixth.

Representatives for Paul Weiss did not respond to a request for comment. Nor anyone from Newmark, where a team of brokers represents the law firm. Representatives for UBS could not immediately be reached.

Whether any part of the scenario comes to pass or not, the drama plays out against the backdrop of the Sixth Avenue/Rockefeller Center district, which is healthier by most metrics than all but one of the other corridors.

According to CBRE’s 1Q dataSixth Avenue’s 12.5% ​​accessibility was surpassed only by Park Avenue’s 11.5% and miles better than 23.7% in East Midtown, 21.3% in the Times Square area, 23.2% in the Penn District and 18, 5% in Midtown overall.