NY State Agency Takes 117 KSF for Manhattan Digs

Empire State Development has leased five full floors at 655 Third Ave. in Midtown Manhattan. Image courtesy of The Durst Organization

Empire State Development, New York State’s economic development and financing agency, has leased five full floors totaling 117,181 square feet at 655 Third Ave. in Midtown Manhattan. The Durst Organization, the building’s owner, announced the transaction.

The deal, for what will be ESD’s New York City headquarters, reportedly is one of the largest new leases in Midtown this year. The agency’s offices will occupy all of floors two through six, comprising more than a quarter of the 30-story, 425,000-square-foot property.

Designed by Emery Roth & Sons and completed in 1958, 655 Third Ave. earned LEED Gold certification in 2019. Its sustainability features include 4,775 square feet of green roofs and double-glazed windows that deflect glare and improve office comfort.

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In a prepared statement, Jody Durst, president of The Durst Organization, referenced the building’s “unparalleled access to transit” and other advantages.

The Durst Organization was represented in house by Tom Bow, Ashlea Aaron and Bailey Caliban. Moshe Sukenik and Brian Cohen of Newmark and Joan Brothers of Manhattan Boutique Real Estate represented Empire State Development.

ESD is New York State’s chief economic development agency, with missions including to promote a growing economy and to encourage the creation of new job and economic opportunities.

Tough market

The Durst Organization reports that several of its properties along Third Avenue have seen strong leasing activity.

• Earlier this year, 655 renewed the Big East Conference as a tenant.
• 825 Third Avenue has seen a preleasing boom with six leases signed totaling 125,000 square feet as the building’s $150 million transformation nears completion.
• Just up the block from 655 Third Avenue, Durst’s 205 E. 42nd St. is becoming a hub for non-profits, with 65,000 square feet leased so far this year.

A year ago spring, Durst landed a prime tenant for a unique space, when information management company Global Relay USA leased 77,000 square feet at the Apex, a penthouse pavilion at Durst’s 1155 Avenue of the Americas in Midtown.

Office absorption in Manhattan was a negative 3.0 million square feet in the second quarter, similar to the first quarter, according to a recent report from Newmark. Subleasing is expected to remain a sizable factor in the office sector, with Google, Verizon, Publicis and Facebook all anticipated to put space on the market.

Fortunately, the construction pipeline is still decreasing, to 4.8 million square feet currently. 2023 completions have totaled 7.3 million square feet, Newmark reports.