Plaza District leases by Chubb and Hermes raise hopes of return

595 Madison Ave.

This bronze and marble art deco edifice, the Fuller Building, is named after its builder, the George A. Fuller Co., one of the city’s most prolific construction companies. Its portfolio includes the original Penn Station, the Plaza Hotel and the Seagram Building. Today, the 40-story, 322,000-square-foot structure is owned by Vornado Realty Trust, which purchased it with the Mendik Company for $125 million in 1999. In a rare move, #595 has historic status both for its exterior and part of its interior. Office tenants include fashion companies such as Bottega Veneta, Marc Fisher and Tom Ford. But the building had only an 81% occupancy rate at the end of last year, according to stock market records. By comparison, Vornado’s 650 Madison at East 59th Street had an occupancy rate of 93%.

590 Madison Ave.

This 43-story, 1 million square foot building, built in 1983 as IBM’s headquarters, in many ways epitomizes the Plaza District. Although it was once occupied by a single tenant, it is now home to a dozen, including the Corcoran Group, Colony Capital and Morgan Stanley. Several financial firms have recently signed small office leases, including Reverence Capital Partners, a private equity firm whose founders include Goldman Sachs alumni. It took 13,700 square feet in the building, which demanded rents of around $135 per square foot. But the tower also got off to a high-profile start. In March, IBM announced it would move its municipal offices to 1 Madison Ave., the Madison Square Park property redeveloped by SL Green Realty and Hines. At the end of March, there were about six office spaces for rent, ranging from 3,600 to 25,500 square feet, according to Jeffrey Sussman, vice president of Edward J. Minskoff Equities, which bought the property for $202 million in 1994 with Odyssey Investment Partners, backed by funds from the Ohio State Teachers’ Retirement System.

432 Park Avenue

The business district took on a residential turn in the mid-2000s when developer Harry Macklowe and the CIM Group bought the former Drake Hotel and began to rebuild the site that would give rise to No. 432, a luxury condominium of 1,396 feet high. It was an expensive business. The Drake cost $418 million, according to the city, while an adjacent site on East 57th sold for $315 million. In addition, various purchases of air rights totaled approximately $18 million. The tower, which was the city’s tallest apartment building for years, has had $3 billion in sales since 2013, but ran into stumbling blocks in 2021 when residents sued, citing construction defects, in particular vibrations due to the swaying of the building. The developers fought back in a lawsuit, claiming the condo board obstructed repairs. During this time, the condo has experienced several major resales. His six-bedroom 96th-floor penthouse hit the market at $169 million in the summer of 2021 and remains Manhattan’s most expensive listing. The borough’s second most expensive neighborhood, at $135 million, is also located there, and several others round out the top 10, according to StreetEasy.

711 Fifth Ave.

This pilaster-lined, 18-story Beaux-Arts office and retail building earned trophy property status when it sold for $909 million in 2019. Coca-Cola was the seller; the buyer was a diverse group that included Wafra (Kuwait’s sovereign wealth fund), Nightingale Properties and Shvo. But there have been challenges. A 39,000 square foot Ralph Lauren store that was the luxury retailer’s largest location closed in 2017 after just four years, although Ralph Lauren’s well-received Polo Bar restaurant continues to serve burgers there. Two watch stores – Swatch and Omega, a subsidiary of Swatch – are also still open, and Swatch seems to have an incentive to keep things running. It signed an $80 million lease, or about $1,600 per square foot, in 2011. Upstairs office tenants include investment firms such as Allen and Company, Sandler Capital Management and Catalyst Investors.

551 Madison Ave.

Small financial companies, law firms, medical practices and a major fashion tenant – Lacoste, which has 35,000 square feet – mix in this 17-story pre-war tower, which Lexin Capital bought for $155 million in 2017. Two of the building’s retail spaces are on the market, as are two office spaces, which are available for $75 per square foot, said Aaron Marcus, the Lexin executive who takes care of the rental. He declined to comment on the property’s occupancy rate. Anecdotally, more employees appear to be working on-site than from home, Marcus said, adding that the flight of office tenants to Hudson Yards that was predicted a few years ago appears to be much less of a factor than we weren’t afraid of him.

550 Madison Ave.

This 37-story giant, built in 1984 for AT&T before being leased (and eventually sold) to Sony, was acquired by Chetrit Group and Clipper Equities for $1.1 billion in 2013 for residential condos. But a downturn in the luxury home market may have spooked developers, who sold the 685,000-square-foot tower for $1.4 billion in 2016 to a partnership led by the Olayan Group. A three-year renovation of the landmark Philip Johnson-designed building added a glazed lobby garden. There’s also a tenant library, courtesy of Assouline, the design editor. This year, the city valued the building at $385 million. While officials generally underestimate market values, it’s worth noting that #550 was valued at $454 million in the pre-pandemic year of 2018, down 15%.

19 E. 57th St.

In an enclave of towering brick buildings, this 24-story sintered glass fragment stands out. The building, inaugurated in 1999, belongs to the French conglomerate LVMH, which also has its American headquarters there. One of the company’s retailers, Christian Dior, occupies the store on the ground floor. Its architect, Christian de Portzamparc, also designed the upscale condo at 157 W. 57th St., a few blocks away. LVMH also controls 598 Madison Ave., a 15-story, 77,000-square-foot prewar building leased until 2045, records show. The building was purchased in the 1980s by a partnership that included the estate of developer Sol Goldman. It has been controlled since 2000 by a team led by Stanley Chera, who died of Covid-19 two years ago.

This piece has been updated to reflect that RXR does not own an interest in 550 Madison.

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