Paramount Group’s second-quarter earnings call mentioned a major unreported lease, but not a different lease signed after the quarter ended.
Chairman and CEO Albert Behler told analysts that 1301 Sixth Ave., one of the publicly traded company’s prime Midtown assets, welcomed investment bank Piper Sandler, which signed for 140,000 square feet. We’ve since learned that law firm Adler & Stachenfeld took 40,000 square feet after the quarter ended.
Sources said JLL’s Frank Doyle and Andrew Coe repped Paramount in both deals but neither could be reached for confirmation. The sources also said a different JLL team repped Piper Sandler and CBRE repped Adler Stachenfeld.
The starting rents for both leases were above $90 per square foot, Paramount execs said on the call.
We also learned from Behler, executive vice-president Peter Brindley and CFO Linda Berberi that:
*Paramount leased 690,000 square feet of offices in New York and San Francisco year-to-date, of which 52% were in Manhattan.
The New York portfolio is 88.1% leased, the highest since early 2022. As per Behler: “The city continues to demonstrate remarkable strength and depth … a clear and sustained flight to quality.”
But the bullish data didn’t take into account vacant 60 Wall St., the former Deutsche Bank tower which Paramount is spending $250 million to modernize and beautify — an omission that was confirmed by a Paramount rep.
Strangely, none of the analysts on the call asked about it. But had 60 Wall’s 1.6 million empty square feet been included as part of Paramount’s Manhattan portfolio, the 88.1% leased figure would be lower.
Asked about debt, Berberi said, “Our largest upcoming maturity, the $860 million loan on 1301 [Sixth Ave.] is backed by high-performing, over 97% leased assets on a pro forma basis in a liquid and well-functioning debt market. We are on track to refinance the asset and look forward to sharing more on our next call.”
As for Showtime Networks’ planned move-out next year from 260,000 square feet 1633 Broadway, another prime asset, Behler said, “We have active showings and the building, as you know, has been solidly leased for the last over 10 years. And the retail is performing well.” Retail tenants include the huge Taiwanese dumpling house Din Tai Fung “which we hear is apparently the highest-grossing” and an incoming outpost of popular trattoria La Pecora Bianca.
Behler said, “Asking rents [at 1633 Broadway] range from, call it, $70 to $90 per square foot and activity at the moment feels very good. We’re trading paper on that Showtime block of floors specifically.”
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