The law firm Haynes & Boone just signed a deal to take 74,600 square feet on two floors at 30 Rockefeller Plaza, the entire 25th and 26th in the landmark 70-story tower.
The firm will be relocating from the nearby Sixth Avenue skyscraper 1221 Avenue of the Americas, where it is currently subleasing about 35,000 square feet from the law firm Sonnenschein Nath & Rosenthal LLP.
Ken Bezozo, the managing partner of Haynes & Boone’s New York office said that the firm, which is based in Dallas, Texas, began practicing in Manhattan with a single attorney in 2004 and has since grown to just under 50 attorneys. He said the deal at 30 Rock, which will more than double the firm’s office space, was done in anticipation of substantial continued expansion and that the firm is aiming to increase its Manhattan practice to 100 attorneys in upcoming years.
“In New York you can’t lease space for just the next two years, you have to lease for a little longer period of that, which is why we took a larger deal,” Bezozo said. “We will consider subleasing some of the space for now to give us time to grow into it but only a small portion, probably around 10,000 to 12,000 square feet.”
Terms of the deal circulating among brokers and passed along to Real Estate Weekly by a source indicate that Haynes & Boone agreed to pay $63.50 per square foot for the first five years of the 15-year lease, $68.50 for the next five and $73.50 for the remainder of the term.
The firm, which is involved in a number of practice areas such as finance, tax, real estate and intellectual property law, also received a sizeable incentive package from 30 Rock’s landlord, Tishman Speyer, to do the deal.
The firm was given $70 per square foot to cover the cost of constructing an office installation in its space, ten months of free rent for 63,000 square feet of the offices and 14 months free for the remaining 12,000 square feet. It also appears that Tishman Speyer agreed to build bathrooms in the space and a common corridor.
Though the incentives seem to be generous, rental rates in the $60s and $70s appear to be at the leading edge of what Class A buildings in midtown are netting in the current market, which has appeared to stabilize since deteriorating during the downturn but hasn’t yet show signs of a sustained rebound.
Bezozo said that the firm considered staying in 1221 Avenue of the Americas but that 30 Rock’s floor plan offered a better fit. The building, constructed in the early 1930s and one of Manhattan’s best known skyscrapers, is distinct for its pronounced rectangular shape with a wide north and south flank but a dramatically thinner profile from the east and west. The layout is good for the firm Bezozo explained because it offers plenty of window space for the firm’s partners without a cavernous core.
“Most of our storage and administrative functions are based in Texas so we don’t need a lot of the back office space that you would normally cram into the center of the floor,” Bezozo said. “This was a very efficient fit for us.”
Another pivotal factor in the deal Bezozo said was Tishman Speyer’s multimillion-dollar renovation of the building in recent years, including a new lobby, windows and heating and ventilation units.
“If it had been the old 30 Rock with a lobby that looked 50 or 75 years old and heating convectors 22 coats thick with paint and windows that were the same way, we wouldn’t have gone there, the renovation absolutely was what made the difference,” Bezozo said.
30 Rock and 1221 Avenue of the Americas, both known as prestigious midtown office locations, have had to fight to hold onto tenants as rival landlords try to lure them away with competing offers in a choppy market. Last week, The New York Post’s real estate columnist Lois Weiss reported that the French financial services giant Société Générale is close to a deal to relocate from 1221 Avenue of the Americas, where it has almost 540,000 square feet, to 245 Park Avenue, a tower owned by the Rudin family.
30 Rock meanwhile is where the investment-banking firm Lazard Ltd. has its headquarters. The company, famous for its advisory services on mergers and acquisitions, is considering its own real estate options as its lease for seven floors in the tower is nearing an upcoming expiration.
Some brokers in recent weeks have suggested that Lazard could renew its space because it is said to enjoy the prestige of 30 Rock. Still, the tower has had to compete with newer office towers that have higher ceilings, more glass and sunlight and fewer support columns.
Ken Rapp, David Kleinhandler and Andrew Sussman, executives at the real estate services company CB Richard Ellis, represented Haynes & Boone in its deal at 30 Rock and will also oversee the sublease of the small pocket of space in the new office that the company will need time to grow into. None of the three could be reached for comment.
Bezozo said that Haynes & Boone will move to 30 Rock in January and February next year in advance of a March expiration of its sublease at 1221 Avenue of the Americas.