Kingdon Capital, the highflying hedge fund, has arranged a deal to stay atop its lofty perch at Carnegie Hall Tower.
The firm, which was one of the boutique luxury skyscraper’s first tenants when it was completed in the early 1990s, just renewed its lease for the five floors it occupies near the top of the 60-story building, a deal totaling about 41,500 square feet.
Kingdon’s lease didn’t run out for the floors, 47, 48, 49, 50 and 51, until 2012, but the firm decided to take advantage of the current market conditions and sign an early 10-year extension stretching beyond that expiration so that it can capitalize on the current drop in rents.
Of course, discounted rents in a building as prestigious as Carnegie Hall Tower are relative. During the market’s peak before the recession, the tower, which has vast views of Central Park, was one among an exclusive handful that could net rates in the mid $100s per square foot and beyond.
Prices that exorbitant have all but vanished since the downturn except for the most unique spaces such as the un-leased top floor of the nearby luxury tower 9 West 57th Street.
Still, many experts familiar with Manhattan’s high end leasing market say that Kingdon’s deal could have been for rates approaching triple figures or that even escalate beyond that benchmark. Kingdon, according to brokers familiar with the firm, had perused the market for competing space before deciding to renew, taking a hard look at 9 West 57th.
It’s not clear if the firm’s consideration of that building could have sprouted into more formal discussions, but deal making at 9 West appeared to come to an abrupt halt when the building’s enigmatic landlord Sheldon Solow reemerged from a mysterious absence and nixed transactions that were being arranged in his absence.
Among those reportedly bumped from the building was the hedge fund SAC Capital, which had been in serious talks to take space there. Solow, who is in his early 80s, is praised as a real estate visionary for developing the stunning skyscraper and other properties, but is notoriously selective of who he allows in the tower and for his insistence on rents well above market, behavior that has allowed large vacancies to accrue.
Billy Cohen the Newmark Knight Frank executive who has been Carnegie Hall Tower’s longtime leasing agent said that even though tenants routinely explore the market to get a sense of their options come time for renewal, few end up leaving Carnegie Hall Tower’s stunning spaces.
“A lot of hedge funds and investment firms in the building feel that it brings them good fortune to be here,” Cohen said, noting that almost the entire upper portion of the tower has all original tenants in place who, like Kingdon, took their spaces when the building was completed.
Incidentally, one of the few tenants to vacate Carnegie Hall Tower in recent years, Atticus Capital, which relocated to the General Motors Building in order to more efficiently spread its operations on that high-end tower’s larger floors, shut down last year.
In another recent deal at Carnegie Hall Tower, Stone Tower Capital subleased its 10,000 square foot space comprising the entire 33rd floor to Scopia Capital.
Cohen said there is virtually no available space in the building except for a few thousand square feet “here and there.”