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October 3, 2008
 
       
 

Slingshot
Opportunities


 

With real estate slipping into deeper waters, it seems that niches are keeping firms afloat—like multi-service provider Denham Wolf, which caters to non-profits and atypical office tenants. Manhattan is becoming more difficult for these smaller tenants to reside in, so serving Davids in a Goliath market is more important than ever. Midtown's non-profits, in particular, are facing sticker shock as their once-$22 PSF rents have crept up to $50 PSF.

 

We visited Jon Denham and Paul Wolf this week in their West 37th Street office, located in Midtown West—a submarket once a haven for many of its clients, but rarely attainable anymore. The firm recently brokered a 25k SF deal for submarket expatriate Social Science Research Council, which is moving to One Pierrepoint Plaza in downtown Brooklyn. The principals tell us the outer boroughs are an attractive alternative to Manhattan, and limited inventory of quality space is what led it last year to acquire the 410k SF BankNote Building, a former money-printing facility in Hunts Point, Bronx.

 

Denham Wolf jointly purchased the century-old asset with Taconic Investment Partners from the Blauner family, and the JV is undertaking a $25M renovation to turn the property into an office center for corporations, arts organizations, design firms, non-profits and community groups, with a focus on the creative sector. Jon and Paul stand in front of an aerial shot of the building, which showcases its enormous windows and skylights—if those don't sell you, perhaps the potential effective rents starting from $12 PSF will. Last week, it announced a lease extension with The Wine Cellerage, a wine services company, at the building. The tenant stores $30 million worth of vintage, some for Christie's Auction House—not bad for a firm that others called "crazy" years ago for tapping an underserved market nook.

 

The building's original tenant, the American Bank Note Company, used the facilities to print foreign currency and stock certificates, so there's no obvious entrance to the building. In addition to constructing more visible access, the firm is currently replacing the building's original windows. Since there is so much natural light in the building, it will also help towards potential LEED Silver certification upon the renovation's completion next year. The challenge, however, is redeveloping around the building's current tenants, which also include Bronx Academy of Arts and Dance, LightBox-NY and Sustainable South Bronx. But Paul has bigger things to worry about—he and his wife are ready to welcome their third child any day now. At least we know where the wine is stored when it comes time to celebrate.

 
 
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