Here’s what Amazon and others are paying at 601W’s 410 Tenth Avenue
Anchor tenants with triple-digit rents have begun moving in to property
Manhattan’s investment sales market got some much-needed good news last fall, when 601W Companies acquired the Amazon-anchored office redevelopment at 410 10th Avenue for $950 million.
SL Green had acquired a majority stake in the property, previously known as 460 West 34th Street, from the Kaufman Organization in 2019 in a deal that valued the building at $440 million. The landlord undertook a complete gut renovation at a cost of about $145 million, and soon secured Amazon as an anchor tenant with a lease for more than half of the space.
601W’s acquisition was financed with a $705 million debt package from JPMorgan Chase, most of which was packaged into a single-asset commercial mortgage backed security transaction known as JPMCC 2021-410T. Documents associated with the deal provide an inside look at the property’s finances.
The 20-story, 632,000-square-foot property is now 99 percent leased, with tenants paying annual gross rent of $97 per square foot on average. Besides Amazon, which leases floors 9 through 20, the other major tenant is First Republic Bank, which has both office and retail space on the building’s lower floors.
The two anchor tenants are now in the process of moving into their spaces. Amazon’s lease commences later this month, while First Republic’s leases commence in April, according to a rent roll cited by DBRS Morningstar.
SL Green is still responsible for completing its prior landlord obligations, which were 96 percent complete as of January. Scaffolding on the building’s facade is set to be taken down starting this month.
Other tenants at the property have been around a bit longer. Related Companies, which occupies the entire 7th and 8th floors, has been at the building since 1987 and has a lease that extends to 2045.
The weighted average lease term of tenants at the building is nearly 16 years, which “should largely shield the property from any short- or medium-term dislocations in the Manhattan office market resulting from the ongoing coronavirus … pandemic,” DBRS’ report notes. The latest financing has a term of seven years, or 10 years if fully extended.
601W, whose name derives from the address of the Starrett-Lehigh Building that the company owned until 2011, now has a office portfolio totalling 45 million square feet, valued at more than $12 billion. The company founded by Mark Karasick has undertaken major redevelopments in Chicago such as the 2.3 million-square-foot Old Post Office and the 83-story Aon Center.
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