Planned Parenthood decamps to lower Manhattan as it sells midtown office
03.31.2015 | Crain's

Planned Parenthood decamps to lower Manhattan as it sells midtown office

Planned Parenthood is selling its West 33rd Street office space for at least $35 million and heading to lower Manhattan.

The reproductive health care and education nonprofit is moving to 123 William St. from 434 W. 33rd St. Planned Parenthood has hired the brokerage Eastdil Secured to sell the approximately 70,000-square-foot condo it owns and occupies at the base of the 13-story Hudson Yards office building at 434 W. 33rd St., which is about 140,000 square feet. Broker Suzanne Sunshine represented Planned Parenthood in its relocation to floors 10, 11 and half of the ninth floor at 123 William St.

Several sources familiar with the sale of the Planned Parenthood office condo say that the leading candidate to buy the space is Brookfield Office Properties, the huge New York City office owner that is developing a $5 billion office, retail and residential complex called Manhattan West on the land abutting 434 W. 33rd St. Brookfield is in talks to acquire the office condo from Planned Parenthood as well as the remainder of the building, a source said. The rest of the building is owned by the investment firm Vectra Management Group, according to property records, as a separate condo interest.

A person familiar with the negotiations said Brookfield, which owns the 8 million-square-foot office and retail complex Brookfield Place in lower Manhattan, has not finalized a deal.

Acquiring 434 W. 33rd St. would give Brookfield control of the only property it doesn’t own on its Manhattan West development site spanning from Ninth to 10th avenues between West 31st and West 33rd streets. Brookfield has planned and begun the huge Manhattan West project without that property. The developer has already broken ground on a residential tower at the site and has finished a platform that decks over train tracks leading into Penn Station. It’s not clear how ownership of 434 W. 33rd St. would change Brookfield’s plans for the development.

A spokeswoman for Brookfield would not comment.

Planned Parenthood will take about 65,000 square feet at 123 William St. The 15-year deal is the biggest in a series of recent leases at the lower Manhattan property that were done by a partnership between East End Capital and GreenOak Real Estate. The pair recently sold the 27-story, 500,000-square-foot building for about $250 million to American Realty Capital, almost double what the two investment firms paid for the tower a year and a half ago. Downtown office buildings have increased in price as tenants flock to the neighborhood, which offers cheaper rents than midtown or midtown south.

East End and GreenOak boosted the building’s value by investing $6 million to refurbish its lobby, elevators, windows and common areas. Working with a leasing team from CBRE Group led by brokers Brad Gerla and Jonathan Cope, the owners signed on several tenants, including the Institute for Career Development, which took neatly 30,000 square feet at the property earlier this year. Other recent deals include nonprofit Single Stop USA’s 10-year lease for 13,000 square feet and the Coalition of Behavioral Health Agencies’ 10-year lease for 9,500 square feet. The building is now fully leased up. Asking rents at 123 William St. are $45 per square foot, well above where rates were when East End and GreenOak took control of the property.

East End could not be reached for comment.