Law Firm Grows Manhattan Footprint to 700 KSF

450 Lexington Ave. will undergo a $300 million capital improvement program. Image by Gensler, courtesy of RXR Realty

Law firm Davis Polk & Wardwell has signed a long-term lease extension and expansion in Manhattan, resulting in a footprint of more than 700,000 square feet at 450 Lexington Ave. The deal marks New York City’s largest office lease of 2023 to date.

CBRE negotiated on behalf of the tenant, which added an entire floor of 30,000 square feet to its current occupancy for the next 25 years. The landlord, RXR Realty, had in-house representation.

The Manhattan office market has witnessed constant vacancy rate growth since the beginning of the year, according to CommercialEdge reports; the index was at 15.4 percent in January, while its June value amounted to 17.2 percent. Recent deals in the borough include Empire State Development’s 117,181-square-foot lease in Midtown, as well as two renewals in downtown Manhattan totaling 108,086 square feet.

Slated for a $300 million renovation program

RXR Realty has owned the 910,273-square-foot, Class A office building at 450 Lexington Ave. since 2012. The company picked up the asset in a $720 million deal from Istithmar World, according to CommercialEdge data.

Built in 1989, the 40-story high-rise near Grand Central has floorplates between 20,000 and 40,000 square feet, 20 passenger elevators, HVAC climate control systems and an emergency generator, as well as 5,000 square feet of retail space. Additional features include ample parking facilities for passenger, freights and lobby shuttle vehicles, a granite ground-floor lobby and a common-area garden lobby.

The office tower’s current tenants include FedEx, General American Investors Co., WeWork, The Prospect Group and PSP Investments, among others, CommercialEdge data shows.

RXR Executive Vice President & Managing Director William Elder and Senior Vice President Andrew Ackerman negotiated on behalf of the owner, with the assistance of Fried Frank. CBRE Senior Vice President Munish Viralam, together with Vice Chairmen Lewis Miller and Andrew Sussman, represented the law firm, in conjunction with Meister Seelig & Fein Co-Chairman & Partner Scott Newmark.

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The landlord plans to invest more than $300 million in capital improvements at the property. Renovation plans call for upgrading the common-area lobbies and workspaces, revamping the elevators and adding multiple amenities inside of Davis Polk’s offices, together with new space configurations and lighting. The Sky Lobby will be fully remodeled, resulting in private outdoor terraces, new seating, landscaping and indoors and outdoors spaces. Gensler will lead the improvement program.