Add another office tower to the grand revival juggernaut on Park Avenue. The latest to report strong returns from a capital improvement program is 277 Park Ave. of the Stahl organization, between East 47th and 48th Streets, where six recent leases – new, extensions and expansions – total nearly 270,000 square feet.
The largest is for M&T Bank, which is moving its regional headquarters to 93,000 square feet at 277 at 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 bigger picture is Stahl’s $120 million repositioning of 277 Park. It’s part of the avenue’s new impetus, driven by billions of dollars of landlord investment to make mid-20th-century towers attractive to 21st-century tenants.
Among other recent marks of confidence in the avenue, SL Green bought the 450 park for $455 million and took control of 245 Park after pulling it out of bankruptcy; Mutual of America hired Munich Re as a 25% partner in 320 Park, and Fisher Brothers spent $20 million to upgrade 299 Park. Tishman Speyer is bringing giant new restaurants to the MetLife tower at 200 Park.
Although Stahl owns six million square feet of office space including the famous Chanin building and 3,000 apartments, it does not promote itself like other owners such as Vornado, SL Green and Rudin do, so 277’s success has been hidden in plain sight.
Changes began in 2018 to “future the future of the building,” said chief letting agent Mark P. Boisi of Cushman & Wakefield. When completed by the end of the year, they will include an impressive new entrance, a new Park Avenue lobby with a 30-foot ceiling, a redesigned Lexington Avenue lobby, an upscale fitness center for ground-floor tenants and new restaurants from celebrity chef David Burke — “the whole magilla” of upgrades tenants are now waiting for, Boisi said.
“This value proposition has really attracted an elite tenant base,” said Boisi, who represented Stahl in all new leases with Cushman’s Bryan Boisi and Gordon Hough.
The tower developed by the late Stanley Stahl opened in 1964 as the headquarters of the Chemical Bank. Tenants have come and gone since, but “it’s been 100% leased for most of its life,” Mark Boisi said.
The fact that several large subleases at 277 Park were set to expire in 2021 “prompted us to say we need to upgrade the building,” he said. “After the moves, we tore down all the sublease space, white boxed it, and re-let it.”
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 vary between $100 and $120 per square foot. Existing tenants include JP Morgan Chase, the largest, and Sumitomo Mitsui Bank.