In a landmark-to-landmark mega-move, private investment firm Clayton Dubilier & Rice is leaving the Seagram Building for more than twice as much space at Olayan Group’s re-invented 550 Madison Ave.
In what appears to be the year’s largest new Manhattan office lease to date, CD&R signed for 144,000 square feet on the 18th-22nd and 26th floors.
The deal brings the Philip Johnson-designed “Chippendale” tower’s 750,000 square feet of office space to nearly 70% leased.
Terms were not disclosed. Sources hinted that the CD&R deal on the tower’s lower half was in the high $100s per square foot, while asking rents on higher floors are well into the $200s and perhaps more at the top.
A broker not involved at 550 Madison marveled, “That building is on fire in the midst of a terrible leasing market.”
Previously signed office tenants at the location are Chubb Group, Hermes, Junto Capital and Corsair Capital.
The leasing frenzy vindicates Olayan’s gamble in spending $1.4 billion to buy the former Sony tower in 2016 and put in at least $300 million more on a redesign done under the watchful eye of the Landmarks Preservation Commission.
It again demonstrates the overwhelming advantage that buildings either brand new or expensively redesigned to compete with them have over older ones — including over Seagram Building, itself a universally beloved designated landmark.
As The Post first reported, Cote restaurateur Simon Kim is creating a 15,000-square-foot restaurant complex at the building’s base.
Kim “definitely increases our cool factor,” said Olayan America head of real estate Erik Horvat.
He added, “CD&R shares our vision of what a modern office space should be — sustainable and forward-thinking with an emphasis on hospitality.”
A CBRE team headed by Mary Ann Tighe, Howard Fiddle and Scott Gottlieb represented the ownership.
Newmark’s Ben Shapiro and Andrew Sachs acted for the tenant.