Add another office tower to the great Park Avenue revival juggernaut. The latest to report strong returns from a capital improvement program is the Stahl Organization’s 277 Park Ave. between East 47th and 48th streets, where six recent leases — new ones, extensions and expansions — total nearly 270,000 square feet.
The largest is for M&T bank, which is moving its regional headquarters into 93,000 square feet at 277 from 350 Park. M&T recently acquired People’s United Bank, expanding its role in the city and on Long Island. Other deals include an expansion by Visa International to 50,000 square feet in the penthouse and private markets firm Stepstone Group for 50,000 square feet.
But the larger picture is Stahl’s $120 million repositioning of 277 Park. It’s part of the avenue’s newfound momentum, driven by billions of dollars of landlords’ investments to make mid-20th century towers attractive to 21st century tenants.
Among other recent expressions of confidence in the avenue, SL Green purchased 450 Park for $455 million and took control of 245 Park after bringing it out of bankruptcy; Mutual of America tapped Munich Re as a 25% partner in 320 Park, and Fisher Brothers spent $20 million to modernize 299 Park. Tishman Speyer is bringing giant new restaurants to the MetLife tower at 200 Park.
Although Stahl owns six million square feet of offices including the landmarked Chanin Building and 3,000 apartments, it doesn’t promote itself the way other landlords such as Vornado, SL Green and Rudin do, so 277’s success has been hidden in plain sight.
The changes began in 2018 to “future-proof the building,” said the chief leasing agent, Cushman & Wakefield’s Mark P. Boisi. When completed by year’s end, they’ll include an impressive new entrance, a new Park Avenue lobby with a 30-foot ceiling, a redesigned Lexington Avenue lobby, a high-end tenants’ fitness center on the ground floor and new restaurants from famed chef David Burke — “the whole magilla” of improvements that tenants now expect, Boisi said.
“That value proposition has really attracted an elite tenant base,” said Boisi, who represented Stahl in all the new leases along with Cushman’s Bryan Boisi and Gordon Hough.
The tower developed by the late Stanley Stahl opened in 1964 as the home to Chemical Bank. Tenants have come and gone since then, but, “It’s been 100% leased for most of its lifetime,” Mark Boisi said.
The fact that several large subleases at 277 Park were to expire in 2021 “prompted us to say we must bring the building up to snuff,” he said. “After the move-outs, we demolished all the sublet space, white-boxed it and re-leased it.”
The leases signed over the past 18 months left only about 100,000 square feet available in the 1.8 million square-foot tower, Mark Boisi said. Asking rents range between $100 and $120 per square foot. In-place tenants include JP Morgan Chase, the largest, and Sumitomo Mitsui Bank.