By Daniel Geiger
Jones Lang LaSalle, one of the city’s largest commercial real estate service and brokerage firms, is moving its Manhattan headquarters to 330 Madison Avenue according to several people familiar with the company’s plans.
JLL, as the company’s name is often abbreviated, will take 330 Madison’s entire third mad fourth floors, a space roughly 82,000 s/f in size, for rents in the $60s per s/f, sources say.
In what is considered a customary quid pro quo that Manhattan landlords usually hand out as an inducement to large leasing brokerages that sign on for a significant lease, Jones Lang LaSalle will receive the assignment to handle leasing at 330 Madison from the building’s owner, Vornado Realty Trust.
JLL is the latest in a succession of major real estate services companies to take space for their own offices in the city. In 2008, Cushman & Wakefield, another large leasing and real estate services company, relocated its global headquarters from 51 West 52nd Street into about 175,000 square feet at 1290 Avenue of the Americas. Vornado, one of the city’s biggest landlords, also owns 1290, making two of the city’s largest brokerage companies its tenants, a fact that sources say the company will wear as a feather in its cap because brokerage companies are considered smart and sophisticated tenants and especially savvy choosers of space.
Late last year, CB Richard Ellis, a company headquartered in Los Angeles but one of the city’s biggest brokerage firms, renewed its lease for about 126,000 square feet at 200 Park Avenue.
In September, Grubb & Ellis, another large brokerage, subleased about 60,000 square feet at 1301 Avenue of the Americas for its New York headquarters.
The deal appears to be an expansion for JLL.
The company, which is headquartered in Chicago, has grown in recent years, acquiring the tenant representation firm Staubach in 2008 to immediately beef up its brokerage operations nationally. In a more Manhattan oriented maneuver, JLL poached an investment sales brokerage team from C& W earlier this year in what was widely seen as a move to immediately expand its capabilities to handle the trade of office buildings and other properties here in the city.
330 Madison, a 39-story, 850,000 s/f building that sits between 42nd and 43rd Streets a block west of Grand Central Terminal, is in the midst of a significant renovation to overhaul many of the property’s common areas and systems, including its elevators, lobby, and facade.
Vornado has spent upwards of $100 million on the upgrades sources say, which the company anticipates will allow the property to achieve LEED Silver certification when the work is finished next year, a benchmark that will denote the building’s energy efficiency and environmental sustainability.
In an office leasing market where vacancy has lingered because of a lack of sustained job growth in the city, some landlords have sought to invest in building improvements to make their properties more attractive to tenants. The substantial work at 330 Madison for instance was said to have been instrumental in JLL’s decision making according to people familiar with the deal.
Impressed by the work, another prominent tenant, the hedge fund SAC Capital, also just signed a deal at 330 Madison, for floors 21 and 35, which total about 31,000 square feet. Because those spaces are higher in the tower, the rent in SAC’s deal is likely more expensive than what JLL will pay for its base floors. Upper floors at 330 Madison come with asking rents in the $80s per square foot and spaces in the building’s mid-rise ate in the $70s per square foot according to a source.
JLL will move from 601 Lexington where it occupies two floors totaling about 60,000 square feet.
Boston Properties, the real estate investment trust that owns that property, has made improvements to the skyscraper in recent years, including the multimillion dollar construction of a new lobby and entranceway leading into the building from Lexington Avenue, a project that helped the company rebrand the tower, which had previously been known as the Citigroup Center because Citibank is its largest tenant.