Bloomberg LP’s 950K-sf Lexington Ave Lease Extension Reveals an Unusual Deal
Approximately 5-years in advance of 2029 lease expiration, Bloomberg LP has signed a lease extension for its 946,815-square-foot space at 731 Lexington Avenue. As part of the deal, an unusual deal was struck that could lower the tenant’s rent by as much as 10%, however, the amount won’t be determined until the extension kicks-in. Under the terms of the extension, a range of net rent after taxes and other expenses between $88.72 at the low and $108.44 at the high was agreed upon, with the determined amount depending on market rates in 2029 for Class A office space. In addition, Bloomberg secured a 12-month rent concession; and Vornado, as the leasing and managing company on behalf of landlord Alexander’s, “committed to spending up to $124 million, or $135 per square foot, on improving 731 Lexington, which has been occupied by Bloomberg since it opened 20 years ago.” News of the 11-year extension that retains the tenant through 2040 comes as a June 2024 refinancing approaches; and although the “signing of the tenant that occupies 98% of the office space should make refinancing much easier, it will likely be at a higher interest rate.
Source: https://www.crainsnewyork.com/real-estate/bloomberg-lp-extends-lease-731-lexington-ave