Add another office tower to the great behemoth of the Park Avenue revival. The latest to report strong returns from a capital improvement program is the Stahl Organization’s 277 Park Ave. between East 47th and 48th streets, where six recent leases (new, additions and expansions) total nearly 270,000 square feet.
The largest is for M&T Bank, which is moving its regional headquarters to 93,000 square feet at 277 from 350 Park. M&T recently acquired People’s United Bank, expanding its role in the city and on Long Island. Other deals include an expansion by Visa International to 50,000 square feet in the penthouse and private markets firm Stepstone Group for 50,000 square feet.
But the big picture is Stahl’s $120 million repositioning of 277 Park. It’s part of the avenue’s new momentum, fueled by billions of dollars of investment by landlords to make mid-20th-century towers attractive to 21st-century tenants.
Among other recent signs of confidence in the avenue, SL Green bought 450 Park for $455 million and took control of 245 Park after bringing it out of bankruptcy; Mutual of America selected Munich Re as a 25% partner in 320 Park, and Fisher Brothers spent $20 million to modernize 299 Park. Tishman Speyer will bring giant new restaurants to the MetLife tower at 200 Park.
Despite Stahl owns six million square feet of office including the iconic Chanin building and 3,000 apartments, is not marketed like other landlords like Vornado, SL Green and Rudin do, so The success of 277 has been hidden in plain sight.
The changes began in 2018 to “future-proof the building,” said lead leasing agent Mark P. Boisi of Cushman & Wakefield. When completed by the end of the year, they will include a stunning new entrance, a new Park Avenue lobby with a 30-foot ceiling, a redesigned Lexington Avenue lobby, a ground-floor luxury tenant gym, and new celebrity restaurants. chef David Burke: “all the magic” of improvements tenants now expect, Boisi said.
“That value proposition has really attracted an elite tenant base,” said Boisi, who represented Stahl on all of the new leases along with Bryan Boisi and Gordon Hough of Cushman.
The tower developed by the late Stanley Stahl opened in 1964 as the headquarters of the Chemical Bank. Tenants have come and gone since then, but “it has been 100% leased for most of its useful life,” said Mark Boisi.
The fact that several large subleases at 277 Park were due to expire in 2021 “prompted us to say we need to get the building in order,” he said. “After the moves, we demolished the entire sublease space, packed it up, and re-let it.”
Leases signed over the past 18 months left only about 100,000 square feet available in the 1.8 million-square-foot tower, Mark Boisi said. Asking rents range from $100 to $120 per square foot. Existing tenants include JP Morgan Chase, the largest, and Sumitomo Mitsui Bank.