Savanna Inks Renewal at Manhattan Office Tower – What is a Ground Lease?

360 Lexington rises 24 stories in Manhattan’s neighborhood of Murray Hill. Image courtesy of CommercialEdge

Savanna has signed a 15,379-square-foot lease renewal at 360 Lexington Ave., a 268,383-square-foot office tower in Midtown Manhattan. Kenneth Park Architects will continue to fully occupy the seventh floor. CBRE’s Senior Vice President Steve Eynon represented the tenant.

Kenneth Park Architects first moved in the space in 1996. Since then, Eynon represented the tenant on five different occasions, including both expansions and renewals at the property.

Other notable tenants include Plaza Construction, MMGY Global, Storeboards Media and CaringKind among others, according to CommercialEdge.

The 24-story office property came online in 1959. It includes six passenger elevators, 15,242-square-foot floor plates and 10,000 square feet of retail space, according to the same source.

Savanna acquired it in 2019 from seller AEW Capital Management for $180 million. Since then, it renovated various aspects of the building, including a new lobby and upgraded elevators. On-site amenities include an eat-in pantry, an open area on the 4th floor, glass-front offices and an open workspace area on the 9th floor.

The Murray Hill office asset is close to Grand Central Terminal and to Bryant Park, 4 miles from Upper West Side, 5 miles from the Financial District, 9 miles from LaGuardia Airport and within 15 miles of John F. Kennedy International Airport.

A slight drop in Manhattan’s office vacancy rate

Manhattan’s office vacancy stood at 16.2 percent as of May, down 80 basis points year-over-year, a recent CommercialEdge report shows. The borough’s rate was below the 17.8 percent national figure, but higher than other Northeastern markets, such as Boston (12.1 percent) and Philadelphia (15.3 percent).

Recent office lease deals included Brighton Park Capital Management’s 16,428-square-foot, 10-year lease at 452 Fifth Ave. A subsidiary of Discount Investment Corp. owns the 30-story, 616,352-square-foot office tower totals.

Asset management company Quest Partners signed a 13,284-square-foot, 11-year deal, relocating its offices at 110 E. 59th St., a 612,181-square-foot office building. The tenant will fully occupy the entire 36th floor at the Jack Resnick & Sons-owned building.

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In the simplest form, a ground lease is a long-term net lease (usually 49 years or 99 years) of land including any improvements on the said land. Assets that can be subject to a ground lease include but are not limited to, vacant land, office buildings, and large residential buildings.