East Midtown is NYC’s most in-demand market as Grand Central proximity beckons

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March 13, 2022
New York, Our Company, Our People

Grand Central Station; Sinvin's Sarah Shannon — The East Midtown area is seeing a surge in interest as prospective tenants are attracted to its proximity to Grand Central Station. Sarah Shannon (pictured), a Sinvin broker, arranged a lease for modern furniture firm Blu Dot in the neighborhood. Meanwhile, a revamped 666 Fifth Ave. — now known as 660 Fifth Avenue — is attracting fresh tenants.

East Midtown is once again Manhattan’s most in-demand office market.

Deals are still being done in the Hudson Yards area, Times Square, Midtown South and at the World Trade Center, but brokers say the momentum has shifted to the East 40s and 50s, which not long ago seemed to have lost their luster.

“Companies with resources are drawn to the blocks around Grand Central Terminal,” one insider said. “They like the energy that came from One Vanderbilt and the recent East Midtown rezoning. They like that the LIRR will soon be coming into the terminal. And they like the reinvestment that’s making old towers new.”

A major lease is said to be in the works for Macquarie Group at Brookfield’s 660 Fifth Avenue, the redesigned tower stripped of its former 666 “satanic” address. Other deals are also poised to happen at the unrecognizably transformed tower.

Meanwhile, sources said that Ken Griffin’s Citadel, which is on a Big Apple hiring spree, is in advanced talks with Olayan America’s 550 Madison Ave., the repositioned former Sony tower where Chubb Group recently signed on as anchor tenant. Citadel is already the largest tenant at L&L Holding Co.’s nearby 425 Park Ave.

660 Fifth Avenue in New York City — The former 666 Fifth Avenue — now rechristened 660 Fifth Avenue — has a major lease in the works, sources tell The Post.

Separately, an unidentified tenant is believed to be taking a high-floor space at SL Green’s One Vanderbilt for close to $300 per square foot.

We recently reported new leasing momentum at Mutual of America and Munich Re’s 320 Park Ave., which — like many other avenue towers — has undergone a major capital upgrade program.

“Coming out of the pandemic we’ll see even more activity in Midtown East,” one broker predicted, “as companies undeterred by ‘work from home’ will continue to seek the stability of what was always Manhattan’s No. 1 commercial heart – Grand Central.”

Ken Griffin’s Citadel is in advanced talks with Olayan America for space at 550 Madison Ave, sources tell The Post.

550 Madison Avenue has seen renewed interest because of its proximity to Grand Central. The building, which was formerly known as the Sony Building, could see a big lease from Ken Griffin’s Citadel

Area near Bloomie’s gets ‘Blu’ lift

The struggling retail scene immediately south of Bloomingdale’s is getting a much-needed lift. Modern furniture mecca Blu Dot just signed a lease for 12,346 square feet on three levels – plus a 2,700 square-foot roof deck – at Vornado’s 715 Lexington Ave. at East 58^th Street.

It will be Minneapolis-based Blu Dot’s second Manhattan store, following the success of its similar-sized emporium at 79 Madison Ave. downtown.

Blu Dot store — Furniture retailer Blu Dot has signed a lease at Vornado’s 715 Lexington Avenue

The retail space at 715 Lexington Avenue will get a big new tenant with furniture retailer Blu Dot joining the neighborhood.

The deal for most of the retail “glass box” was negotiated by Sinvin’s senior managing director Sarah Shannon for Blu Dot and by Vornado’s Edward Hogan and Jason Morrison in-house.

Blu Dot co-founder and CEO John Christakos said, “With the success of our flagship store in the Nomad Design District, we are excited to expand Blu Dot’s presence in Manhattan with this new store in the heart of the East Side design community.”

Sinvin's Sarah Shannon — Sinvin’s senior managing director Sarah Shannon negotiated the lease for the Blu Dot space.

Sinvin’s Shannon said, “With over 120 feet of wraparound glass frontage over the second and third floors, Blu Dot will have a powerful presence. The roof deck will allow Blu Dot to showcase their outdoor furniture line and to host customers and special events.”

The low-rise building at 715 Lexington is one of two that Vornado built years ago to add a classy retail environment on the south side of East 58^th, across from the developer’s condo-and-office tower at 731 Lexington.

The space where Blu Dot will open – likely by year’s end – has been vacant for some time. Terms were not available. A Santander bank branch that’s also at the address will remain.

Extra, extra: A new Starbucks! (Really)

A long time ago, in a galaxy far, far away – i.e., pre-pandemic – a new Starbucks opening wouldn’t merit a glance.

But it’s been as long as anyone can remember since the barista behemoth launched a new outpost in the heart of Midtown, which has seen mostly Starbucks closings and “consolidation.”

Now, Starbucks has leased a prime corner at Westbrook Partner’s 444 Madison Ave. Asking rent on the former Florsheim space was $350 per square foot.

Cushman & Wakefield’s Steven Soutendijk and Sean Moran repped the landlord while David Firestein repped Starbucks.

Grand Central Station's Great Hall — Grand Central Station is a draw for commercial buildings in the Midtown East neighborhood, real estate industry watcher said.

The deal actually is a relocation rather than an expansion, as the new store at 444 Madison will replace one nearby. But it’s a welcome sign that Starbucks, long a symbol of Manhattan’s high-caffeine energy, is back in the game.

Westbrook’s 444 Madison has seen new energy on the office-leasing front as well, having recently signed the nonprofit Doris Duke Management Foundation and financial firm EOS Investors, as the Commercial Observer reported last month.