Third Ave. is unlikely investor hotspot as Manhattans core leases up

Third Avenue was never a first for tenants.But as Class A office towers along Fifth, Sixth, Madison and Park avenues lease to capacity, Third is becoming a respectable finish.“All of a sudden there’s a new focus on Third Avenue, not only by the owners, but by the tenancy,” said Dan Shannon, an architect who heads MdeAS.

“We studied one for a conversion to residential that looked very good and during that study it started leasing again as a commercial office building.”And while companies heading east may sacrifice location, they’re getting lower rents and higher floors with better views in return.“The fact is, all the buildings on Park and Madison that are often more desirable are not only seeing rents that are higher, but availabilities are mostly only on the lower floors,” said Adam Henick of Current Real Estate Advisors.Several Third Avenue towers have prebuilt offices ready to rent as small as 2,000 square feet, as well as multi-floor blocks from 60,000 square feet upwards to 200,000 or even 500,000 square feet.

In fact, aside from two larger office buildings — Vornado’s No.909, with 1.34 million square feet and floorplates of about 34,000 square feet; and SL Green’s No.

919, with 1.5 million square feet — Shannon says the rest are “right-sized” for accounting, law firm and health care office use with 500,000 to 800,000 square feet.Adding to the desirability, a number of renovations have recently completed or gotten underway on the avenue: at BentallGreenOak’s No.685; SL Green’s Lipstick Building at No.

885; Sage Realty’s No.777; and Waterman Interests and HPS Investment Partners’ $60 million overhaul of No.

850.The Durst organization also owns a number of Third Avenue towers.It has infused $150 million into No.

825 by adding Dynamic View windows that automatically adjust to the sunlight, new building infrastructure and retail storefronts along with a new lobby and hospitality-focused building amenity with a wrapar...