425 Park Avenue tower – rendering courtesy L&L Holding
425 Park Avenue is today an existing office building in Midtown Manhattan, containing 650, 000 square feet of space. A fairly innocuous design, its 31 floors with two set backs on the way up, was built in 1957 between 55th Street and 56th Street and occupying the whole block in between.
It was one of a number of curtain wall buildings put up at the time on Park Avenue, mimicking the then groundbreaking Seagram Building of the same era. Not all International Style buildings were created equal, that is for sure, and this was certainly not one of the best.
As such in recent years it failed to hold strong rentable values and, eventually, rather than let it languish a plan to completely redevelop the property was developed, which is quite unusual as the building is only 56 years old. The building had been owned in a joint venture between Lehman Brothers, which owned 90% and New York based real estate development company L&L Holding, which owned 10%.
425 Park Avenue skyscraper by Foster Partners
After Lehman Brothers went bankrupt during the last financial crisis the project stalled, even though the prestigious English architectural firm, Norman Foster and Partners, was selected in 2012 to design an effectively brand new, 41 storey office building, winning a design competition against a number of other top “starchitects.”
Finally in July 2013, L&L Holding, which is led by CEO David Levinson and his partner Robert Lapidus, bought out the Lehman interest for about US$140 million from what is left of Lehman as it unwinds its affairs, bringing in new, and undisclosed, investment partners to supply the equity required.
This has allowed work to proceed on obtaining the final building permits and award of construction contracts, which, L&L announced yesterday is now all done. Accordingly, finally they are getting ready to commence, digging on the site with shovels going into the ground in the Spring of this year.
To some extent the developers had been, like a number of other New York developers, holding out for the major Midtown East re-zoning exercise that departing Mayor Bloomberg had been calling for which would have permitted 15% greater density on this site, and indeed on many other sites on the east side of town.
When the plan collapsed with council refusing to endorse it, the Midtown East rezoning plan has lapsed. New Mayor Bill de Blasio is now calling for it to be reintroduced for discussion again, but only by sometime next year in 2015.
Accordingly, David Levinson has now pushed the start button for this new project exactly as it is. The new building will therefore have the same square footage as before now, at 650, 000 square feet, but it will be a much taller building at 687 feet high with the more fashionable open floors that tenants like today.
In another clever touch the architects pushed the core from the middle to the rear of the building, maximizing the views of Park Avenue for its occupants and minimizing the loss of elevator efficiencies with the taller structure.
Also, in a very special legal wrinkle peculiar to New York, L&L are only demolishing the top 75% of the existing structure, leaving the bare steel work of the bottom 8 floors intact. The current zoning for the site is actually for a building smaller than the one that was permitted to be built in 1957, so if they had demolished it all the replacement would then have had to be a good deal smaller, and likely completely uneconomic.
By keeping the base, albeit totally gutted, re-sheathed and beautifully re-finished in line with the rest of the project it is for all intents and purposes a completely new structure. New York developers are the most inventive you can find in such matters.
We just heard of more US$200 per square foot rents in Midtown for office space over on 9 West 57th Street again, so the market for office space in the neighbourhood is clearly back on track. L&L’s timing is good therefore, though we have not heard of leasing activity yet which is presumably the next step for this really beautiful new building. If they are proceeding without pre-leasing they must have some pretty heavy financing in place.
425 Park Avenue today. Photo Source inhabitat.com