June 18, 2008 by jack petrie.

Square 1 Bank, a Durham, N.C.–based financial services firm, has recently signed a seven-year lease for office space at 424 Madison Avenue, NYC, 10017. The Madison Avenue location is Square 1 Bank’s tenth location, joining branches in Austin, TX; Boulder, CO; Durham, NC; East Palo Alto, Los Angeles and San Diego, CA; McLean, VA; Seattle, WA and Waltham, MA. Square 1 Bank was represented in the transaction by Jack Petrie of CresaPartners.

About Square 1 Bank

In 2004, CEO Richard Casey sat down at his kitchen table with a few of his closest associates for a little entrepreneurial discussion. This discussion turned into planning sessions, and those planning sessions set the stage for the Square 1 Bank dream to become reality. On August 8, 2005, with many long hours logged at that same kitchen table, the doors to the first six Square 1 Bank offices opened for business. A little over a year later in October 2006, Square 1 reached profitability and surpassed their client goal by 38%. Today, Square 1 Bank has four additional offices, has reached a billion dollars in assets, and accumulated $352 million in loans and $898 million in deposits.

About 424 Madison Avenue

424 Madison Avenue located between 48th and 49th Streets is a 75,000 square foot office building constructed in 1926. It is currently owned by BLDG Management Company, Inc. and is currently 97.4% leased. Major tenants include North Fork Bank and the World Gold Council.

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June 18, 2008 by jack petrie.

First Quarter 2008 Market Update

Tenant’s Viewpoint

Asking rents are expected to remain flat over the next few quarters. More sublease space will come on the market and landlords will be more reluctant to exercise their recapture rights. Recent economic events have produced sufficient uncertainty to change landlords’ attitudes towards deal making. Incentives to tenants are on the rise and landlords will increasingly be motivated to get a transaction done. This is welcome news for tenants with requirements over the next 2-3 years. There is a window of opportunity that tenants should be looking to take advantage of.

Market Overview

The level of unease in the New York City office market is increasing in light of the layoffs on Wall Street and the recent collapse of Bear Stearns. Further job losses are expected and this will check the demand for space and put more sublease space on the market. Tenants are rethinking their plans and, in some cases, are withdrawing from transactions or major commitments. However, the statistics are slow to react: Class A space vacancy in Midtown increased only slightly whereas Class A space vacancies in Midtown South and Downtown actually decreased in Q1. There were negative absorptions in all submarkets except Midtown South and Downtown.

Trends & Statistics

Midtown
Midtown Class A vacancy rates increased from 4.5% to 4.7% in the last quarter. Asking rents for Class A space continued to increase to $84.46 per rentable square feet (rsf). Vacancy in Class B midtown space increased from 3.9% to 4.3%, with asking rents barely increasing from $53.81/rsf to $53.97/rsf. Q1 2008 net absorption was -355,632 rsf for Class A space, the first negative absorption in quite some time. Class B absorption was -258,529 rsf.

Midtown South (Class A & B)
Q1 vacancy decreased nominally from 4.0 to 3.6% from Q4, with asking rents increasing $0.41/rsf (0.8%) to $54.26/rsf. Net absorption in Midtown South was still low at 9,822 rsf, a reflection on extremely limited availability in the submarket and lower activity in light of current economic conditions.

Downtown
Class A vacancy dropped by 11.3% from 5.3% in Q4 to 4.7% in Q1, with asking rents increasing slightly ($0.48/rsf) to $52.94/rsf. Class B vacancy increased marginally in Q1 2008 to 10.1% from 9.0% in Q4, but asking rents climbed at a slower pace than the prior quarter — only 1.5% to reach $47.41/rsf.

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