Fairfield County Investment Firm Inks First-Ever NYC Office Lease At 711 Third Ave.
As uncertainty grips New York City’s office market and some companies downsize their square footage requirements, one Tri-State Area finance company is expanding its office footprint into Manhattan for the first time ever.
Greenwich, Connecticut-headquartered investment firm Ellington Management Group, which manages $8.5B, signed a lease for nearly 20K SF on the fifth floor of SL Green Realty Corp.’s 711 Third Ave., the real estate investment trust announced Tuesday. This is Ellington’s first location in New York City, a spokesperson for SL Green confirmed to Bisnow.
“This transaction comes on the heels of several recent new leases within our portfolio as leasing velocity increases due to tenants rapidly re-entering the market now that vaccines are widely available and companies announce plans to reboard employees back into the office,” SL Green Executive Vice President and Director of Leasing and Real Property Steven Durels said.
The Class-A office building sits in between 44th Street and 45th Street in Midtown, blocks away from Grand Central Terminal, and counts McKinsey & Co. and Ackman Ziff Real Estate Group among its tenants.
Asking rent for the building's newest lease was $63 per SF, according to the SL Green spokesperson. Cushman & Wakefield’s Stephen Baker and Andrew Ross brokered the deal for the tenant.
This comes as many companies are considering a hub-and-spoke model as they return to the office — with a central hub in the city and then satellite locations in the suburbs. In addition to its Fairfield County office, Ellington also takes space in London, according to its website.
The company did not respond to questions about the decision to expand into New York City. Cushman & Wakefield declined to immediately comment.
Midtown is seeing the bulk of NYC office lease activity so far this year, with the submarket accounting for 75% of all citywide leases signed in Q1 of this year. Finance, insurance and real estate companies — like Ellington Management Group — made up the majority of new leases signed in Midtown during that period.
Class-A office spaces, close to transportation hubs, will likely see the highest level of leasing activity as the city begins its recovery, experts have told Bisnow in recent months.
“I think that flight-to-quality trend that we’ve seen pre-pandemic is certainly going to continue,” Savills New York and Tri-State Area Research Director Danny Mangru told Bisnow in an interview about the office market last month.
CORRECTION, MAY 26, 2021 3:35 P.M. ET: An earlier version of the story stated individual brokers at Cushman & Wakefield declined to immediately comment. Bisnow contacted a company spokesperson, not the brokers. This story has been updated.