It May Cost SL Green $100M To Lure Carlyle Group To One Vanderbilt
SL Green may have reached the yearly leasing goal at its signature development One Vanderbilt, but it has come at a price.
The firm inked a deal for Carlyle Group to take 94K SF at the $3B tower earlier this month. But the deal involves SL Green agreeing to take over the private equity firm's current lease at 520 Madison Ave., which could cost at least $100M, Crain’s New York Business reports.
Carlyle’s lease there spans almost 120K SF and lasts until 2031, according to Crain's, citing CoStar data. SL Green would likely negotiate a deal that would see it paying a termination agreement, rather than the full rent, or find a sublessor.
One Vanderbilt is slated to reach 1,410 feet once completed. Construction started at the building in 2016, and it has reached 34 stories. SL Green expects the building to reach 55 floors by the end of the year.
In announcing the Carlyle Group lease, SL Green said it is now 37% leased and has already reached its 2018 goal. In January, law firm Greenberg Traurig said it will take 133K SF in the building.
TD Bank is also taking 200K SF, and Germany-based DVB Bank has signed on for 35K SF. Law firm McDermott Will & Emery is taking 106K SF in the building. SL Green is not the only landlord making concessions to tenants in New York City. In Manhattan, the use of concessions and incentives has hit new highs.
Competition in the office market is cutthroat, and millions of square feet of new or renovated buildings are due to hit the city’s supply in the coming years. Even developers of skyline-altering trophy towers are forced to dig deep into their pockets to convince tenants to move in.