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Forty North does high-priced deal in 9 West 57th Street

10:19 am, August 2, 2011

By Daniel Geiger

Forty North Capital, an investment firm that manages funds for a number of wealthy families, is leasing 17,000 s/f in the pricey midtown office tower 9 West 57th Street, sources say.

The firm will be taking a over half of the building’s roughly 30,000 s/f 30th floor, about 17,000 s/f, for rents in the $160s per s/f, among the highest to be paid in recent months in the city.

Among the investors that Forty North works for is the Winter family, a prominent New York real estate dynasty that owns several office buildings, including 730 Fifth Avenue.

9 West 57th Street is one of Manhattan’s highest end office buildings, owing to amenities like its sweeping views of Central Park, floor to ceiling windows and prestigious image.

The tower, along with a small handful of other properties in the city such as the General Motors Building, have begun to push rents back towards records set before the recession, which topped out around $200 per s/f.

A number of deals have been done in the 50-story building for exorbitant rents. In May, Lightyear Capital, a private equity firm, took about half of the 31st floor for rents that start at $165 per s/f and escalate to $170 per s/f over the life of the 10 year deal.

Even floors lower floors, which typically charge less expensive rents because of the less impressive views, get triple figure rates at 9 West. In March, Summit Rock Advisors, a financial consultant and portfolio manager, expanded into about 14,000 s/f on the building’s 12th floor and extended its lease for seven years, paying rents just above $100 per s/f. The company had previously had about 8,300 s/f on the floor.

Earlier this year, Kohlberg Kravis & Roberts and Apollo Global Management, two long time tenants at the property,  renewed and expanded, taking about 140,000 s/f and 125,000 s/f respectively for rents hovering in the $140s per s/f. Scott Panzer, a vice chairman at the real estate services company Jones Lang LaSalle, acted as a consultant and representative on those two deals, which were seen as pivotal in underpinning the building’s core occupants.

Although 9 West is known as one of the city’s more exclusive office buildings, its enigmatic landlord Sheldon Solow has been famously choosy in deciding which tenants to do deals with and large blocks of vacancy have accrued in the 1.5 million s/f skyscraper, which Solow developed in early 1970s.

Soon after the deals with KKR and Apollo were done, Panzer and two other JLL executives, Jeff Fischer and Howard Hersch, were named as Solow’s leasing representatives at the property. None were available for comment.

Ben Friedland, a senior vice president with the real estate services firm CB Richard Ellis, represented Forty North in the deal. Friedland, who specializes in high end office leases and is one of the agents at the rival skyscraper the GM Building, also couldn’t be reached.

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