Here’s a story we have not written in some time: a large-scale chess game involving the potential moves of two big corporations and three front-line skyscrapers.
It’s refreshing to listen to about big deals that will or will not be happening at a time when the high-end industrial real estate market is generally in an eerie stagnation dominated by renewals and small recent leases.
Market sources have told us that Paul Weiss, a tenant at RXR Realty and China Life 1285 Sixth Avenue for nearly 30 years, is considering moving to a rather smaller space at Fisher Brothers 1345 Sixth Ave. 2026.
The powerful law firm has over 500,000 square feet at 1285 Sixth.
With the Paul Weiss landing in mind, Fisher allegedly placed on hold several negotiations with potential tenants at 1345 Sixth to take over a few of the former Bernstein floors that Paul Weiss was to make use of. Last yr, AllianceBernstein moved most of its operations to Nashville, Tennessee.
Meanwhile, in a separate but related situation, UBS – a good larger tenant at 1285 Sixth than Paul Weiss, with over 800,000 square feet – is alleged to be toying with the relocation of huge Credit Suisse branches that UBS recently acquired from SL Green’s 11 Madison Avenue to 1285 Sixth.
Well-placed sources say UBS intentions have thrown a monkey wrench into the situation at 1285 Sixth, where the lease runs beyond 2030.
“They wish to consolidate the Credit Suisse space. In the event that they can do this at 1285 Sixth, it’d motivate Paul Weiss to seek out a recent home as they desired to expand. But there are not many blocks [at other buildings] available in the scale he needs,” said certainly one of the informants.
One other source said that Paul Weiss actually preferred to remain at 1285 Sixth if he could grow there, but “the Credit Suisse case has complicated things.”
Source SL Green said UBS/CS “is removed from developing an actual estate strategy for 1285 Sixth and 11 Madison. They might not yet be clear on which CS business lines are to be retained or sold and what the ultimate variety of employees will probably be. Only then will they deal with where people will probably be positioned.”
RXR chief executive Scott Rechler declined to comment, as did CBRE’s Peter Turchin, Agent 1345 Sixth.
Representatives for Paul Weiss didn’t reply to a request for comment. Neither does anyone in Newmark where the brokerage team represents a law firm. UBS representatives couldn’t be contacted immediately.
No matter whether any a part of the script comes true, the drama takes place against the backdrop of the Sixth Avenue/Rockefeller Center neighborhood, which in some ways is healthier than all but certainly one of the opposite corridors.
In line with CBRE data for the primary quarter, Sixth Avenue’s 12.5% availability was only higher than Park Avenue’s 11.5% and a mile ahead of East Midtown’s 23.7%, Times Square’s 21.3%, 23.2% in the Penn District and 18.5% in Midtown Overall.