Madison Square Park being transformed

Real Estate Weekly, May 15, 2002 by James Buslik

Like Union Square and Bryant Park after their respective revitalization efforts, the blocks abutting Madison Square Park and the surrounding neighborhood are poised to see an increase in leasing activity when the commercial market begins its cyclical leasing upswing.

Located between Fifth Avenue, Madison Avenue, and 23rd and 26th Streets, Madison Square Park joins Thompkins Square Park, Union Square Park, Grammercy Park, Bryant Park and Central Park as a welcome exception to Manhattan's otherwise unyielding grid of streets and buildings.

Recent aggressive public/private initiatives have made the neighborhood more desirable than ever, and it is poised now to reap the benefits of a major reduction in crime and homelessness.

The $12 million campaign for the New Madison Square Park is the most significant of these endeavors. Led by the City Parks Foundation and the City of New York Parks & Recreation Commission, the campaign rebuilt and improved the historic park, which was named after president James Madison in 1814. It in interesting to note that between 1879 and 1925, the park's neighbors also included the first and second Madison Square Gardens (the current Garden at Penn Station is the fourth). Simultaneous with the rebuilding of the park, property owners have been making significant investments in upgrading and modernizing their buildings.

The new Madison Square Park was rededicated on June 12, 2001. Neighborhood workers can now enjoy re-seeded lawns and flowering plants, a restored 19th-century fountain, a contemporary reflecting pool, preserved monuments, World's Fair-style benches, and a new children's playground.

Further, preliminary plans are in the works to establish a permanent 23rd Street Business Improvement District, which will ensure the continued upkeep and investment in the area.

Anchored by the giftware and toy industries, as well as corporate heavyweights like the New York Life Insurance Company and Credit Suisse First Boston (both of whom were major donors to the Park's revitalization campaign), the buildings around Madison Square Park are undergoing a rebirth of their own.

MetLife Insurance Company has spent millions in a loving restoration of the building it owns, but no longer occupies, to the park's east. The New York Life Insurance Company's building, north of the park, is topped with a gilded pyramid.

Other savvy landlords are renovating and refurbishing their properties as well. For example, we at Adams & Company have invested in excess of $2 million in improvements at 11 E. 26th Street, the 21-story office building bordering Madison Square Park.

Among the improvements we made were the total upgrade of all elevators to top-of-the-line systems and new decorative cabs. In addition, new windows were installed throughout the building, and the electrical service to the building was upgraded to meet the needs of the 21st Century tenant. In this regard, high speed telecommunications capabilities were also added. We then recaptured retail space from an exiting tenant and expanded and refurbished the lobby into a welcoming, professional entryway.

Similar undertakings at other buildings in the Madison Square Park area include installation of state-of-the-art technology and security elements, refinished facades, and reconfigured raw and pre-built space.

The market that these revitalized buildings face is full of promise, and peril. When Credit Suisse First Boston moved to the neighborhood in the mid-1990's, the financial company gave it long-deserved respectability in a single stroke. The make-up of space meant the area was well poised to benefit from the dot-com golden age. Its status as the center of New York's digital world led to its receiving the moniker "Silicon Valley." But when the technology stock bubble burst, neighborhood landlords paid a price in rising vacancy rates and falling rentals.

Today, the improvements that have been made to the park and to area buildings are permanent changes that will help more quickly boost the area towards recovery. With beautiful, modernized buildings and a lovely neighborhood amenity in the park, landlords have something unique to offer tenants. As a result, they can expect demand to spike in the environs of Madison Square Park slightly ahead of, and stronger than, the broader Midtown South market.