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Crain’s New York: To Land High-Flying Financial Firm, Midtown Spire Developer Made Huge Concession

According to Crain's New York:

In signing a high-priced lease last month at a 1,400-foot office spire rising beside Grand Central Terminal, the Carlyle Group, one of the city's most prominent investment firms, received a major incentive.

SL Green Realty Corp., the public real estate company developing the $3 billion tower 1 Vanderbilt, agreed to take over Carlyle's existing office lease at 520 Madison Ave.—a commitment that could be worth $100 million or more.

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"The money vested in 1 Vanderbilt is a good-sized chunk of the overall company," said Danny Ismail, a REIT analyst with Newport Beach–based Green Street Advisors. "There's been pressure for the company to meet its preleasing targets."

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"Concessions have been high this cycle," Ismail said. "You haven't seen a letup in concession packages that you normally would with high levels of occupancy and record employment. The rise in concessions appears to be eating up all the growth on the asking-rent side."

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