Amenities and Easy Commute Spark Heightened Tenant Interest in Grand Central Area

Today’s tenant market has fueled more aggressive competition among landlords as they vie for tenants in the market. All the competition is making relocation less expensive than a renewal; while brokers are “achieving strong deal packages” at buildings where owners are “desperate to keep their larger tenants” as exemplified by a possible relocation by large law firm Davis, Polk & Wardwell that ultimately ended in a retention and expansion deal at 450 Lexington Avenue following promises of $300 million in capital improvements by the landlord. Efforts to attract tenants “has led to the creation of exciting spaces — especially in the area surrounding Grand Central Terminal.” Cited in example is the array of restaurants and seating within the interior public atrium at 335 Madison Avenue, aka 22 Vanderbilt Avenue; and a basketball court and rock-climbing facility within the basement amenity dubbed the Playground at the Seagram Building, 375 Park Avenue. Above average amenities combined with the recent addition of the extension of the Long Island Rail Road to the east side creating seamless connection to Grand Central Terminal has even lured the interest of tech companies away from traditional tech areas like Midtown South to the “glass buildings in Midtown proper” or around Penn Station near their clients — citing the slated December reopening of Penn 2 with a below-grade fun zone and access to “acclaimed amenities” at the adjacent Penn 1 building where rents “are now averaging $90 a foot.”