The 145-year-old nonprofit will lease space in a Queens building where the city's Department of Human Resources, many of whose clients also use the Foundling, is the main tenant.
The New York Foundling, a nonprofit support-services group for children that has called Manhattan home for 145 years, is bringing a big part of its operations to Long Island City, Queens. The group, which put a West Village building it has occupied since 2002 on the market in March for $47.5 million, has signed a deal to move a portion of that operation to the Center Building, a 450,000-square-foot office property at 33-00 Northern Blvd.
The organization is taking 35,000 square feet, the Center Building's entire fifth floor, for 15 years. Asking rents for the space were in the $30s per square foot. The New York Foundling will continue to run operations from its headquarters in Chelsea. A spokeswoman for the agency said it will maintain services for a period of time at the building it is selling in the West Village, at 27 Christopher St.
The deal is the latest example of how more Manhattan tenants are heading to up and coming office markets in the boroughs like Long Island City and parts of Brooklyn because it's more convenient to their workforce or clients--not to mention cheaper than neighborhoods like midtown or lower Manhattan. In the case of the New York Foundling, the Center Building's main tenant is the city's Human Resources Administration, an agency that provides social services to city residents, many of whom either can or already do utilize the Foundling. "This was a big draw to locating in the Center Building, as we likely have many shared clients and this provides an extra convenience for New Yorkers who need our services and those of HRA," said Bethany Lampland, COO of the NY Foundling.
Madison Marquette, a real estate investment firm, acquired the LIC building at the end of 2012 for $84.5 million in partnership with Perella Weinberg Partners Asset Based Value Strategy. "The resurgence of Long Island City continues," said David Schiff, a partner at Perella Weinberg Partners. "[This lease] reflects the value tenants are finding in the area." The owners have put work into the building, including a conversion of its loading docks into retail space that they subsequently leased out to food tenants. The landlords are also planning a multimillion dollar lobby renovation and are exploring building a roof deck as a tenant amenity space.
Ryan Colbert, who opened Madison Marquette's New York City office with colleague Arvind Bajaj in 2012, and has played a central role in finding successful investments for the Washington D.C.-based firm in the city's boroughs, predicted the Center Building is already worth nearly double what the partnership paid for it. "We're getting higher rents than when we purchased the property," Mr. Colbert said, noting that rates formerly were in the mid-$20s per square foot.
Josh Kleinberg, a broker at Pinnacle Realty, represented Madison Marquette in the deal and CBRE represented the New York Foundling. Last week, the New York Foundling leased ground-floor retail space at its headquarters office in Chelsea to Long Island City-based coffee chin Coffeed.