Steve Cuozzo

Business

realty check

By Steve Cuozzo

April 23, 2023 | 12:57pm

Sources say that UBS and Paul Weiss are considering moves that would involve three first-line office towers.Google Maps

Heres a story of a kind we havent written in a while: a large-scale chess game involving potential moves by two huge companies and three first-line office towers.

Its refreshing to learn of large deals that might or might not even happen at a time when the high-end commercial market is mostly at an eerie standstill, dominated by renewals and small new leases.

Market sources told us that Paul Weiss, a tenant at RXR Realty and China Lifes 1285 Sixth Avenue for nearly 30 years, is considering a move into slightly less spaceat Fisher Brothers 1345 Sixth Ave. when its lease at 1285 expires at the end of 2026.

The powerful law firm has more than 500,000 square feet at 1285 Sixth.

With an eye on landing Paul Weiss, Fisher has supposedly put a hold on several negotiations with prospective tenants at 1345 Sixth to take parts of the former Bernstein floors, which would be used by Paul Weiss. AllianceBernstein moved the bulk of its operations to Nashville, Tenn., last year.

Meanwhile, in a separate but related situation, the buzz is that UBS an even larger tenant at 1285 Sixth than Paul Weiss, with more than 800,000 square feet is toying with moving large units of Credit Suisse, which UBS recently acquired, from SL Greens 11 Madison Avenue to 1285 Sixth.

Well-placed sources said that UBSs intentions have thrown a monkey wrench into the situation at 1285 Sixth, where its lease runs beyond 2030.

Theyre looking to consolidate the Credit Suisse space. If theyre able to do it at 1285 Sixth, it could motivate Paul Weissto find a new home because they were looking to expand. But there arent many blocks [at other buildings] available of the size it needs, one insider said.

A different source said that Paul Weiss actually preferred to stay at 1285 Sixth if it could growthere, but, The Credit Suisse thing complicated things.

An SL Green source said that UBS/CS is a long wayfrom developing a real estate strategy relative to 1285 Sixth and 11 Madison. They may not yet have clarity as to which CS business lines are to be retained or sold and what the final head count will be. Only after that will they focus on where people will be located.

RXR chief executive Scott Rechler declined to comment, as did CBREs Peter Turchin, the agent for 1345 Sixth.

Representatives for Paul Weiss didnt respond to a request for comment. Neither did anyone from Newmark, where a brokerage team represents the law firm. Reps for UBS could not immediately be reached.

Whether or not any parts of the scenario come to pass,the dramaplays out against the backdrop of the Sixth Avenue/Rockefeller Center subdistrict, which is healthier by most metrics than all but one other corridor.

According to CBREs 1Q data, Sixth Avenue availability of 12.5% was bettered only by Park Avenue at 11.5% and miles better than 23.7% in East Midtown, 21.3% in the Times Square area, 23.2% in the Penn District and 18.5% in Midtown overall.

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Big office tenants and towers playing high-stakes chess game in Manhattan - New York Post