Renaissance Plaza leasing up

Real Estate Weekly, May 29, 1996 by Lois Weiss

While he could not discuss the details, Muss confirmed that Paine Webber is in the process of marketing the sale o f bonds based upon leases for the project.

Paine Webber Real Estate, sources say, is compiling two private offerings comprising approximately $150 million.

The top 24-stories of the 31-story building will contain 800,000 square feet of Class A office space while the bottom is to become a Marriott Hotel and will have "substantial" parking for over 1,000 cars.

The office leases include one to the Brooklyn District Attorney's office and another to Leucadia National Corp. Mark Hornstein, a vice president in the real estate department of Leucadia, confirmed its Empire Insurance Company would move to nine floors in the new building.

That company is currently located at 122 Fifth Avenue in space in excess of 15,000 square feet. The group is comprised o All City Company and other subsidiaries and employs 800 people.

While the District Attorney would lease 14 floors, sources say they won't be using all of it and Muss will be releasing that portion. The DA's office. however, will have the right to recapture the space in 10 years.

The full lease will help enable the securitization to go through with credit-worthy tenants while the city will have the expansion ability.

The 385-room seven-story hotel portion will have a large banquet, convention, and meeting room facilities, including a ballroom to accommodate 2,000 people.

It was only in June of 1995 that Borough President Harrison Golden convinced the city officials to give Muss another year to obtain the loans. If he does not have them in place by June 1, Muss would forfeit $1.5 million and would have to walk away from the property.

The market still remains active with tenants eager to find Class A space, says broker Glenn Markmann of Grubb & Ellis, who recently leased another floor in One Pierrepont Plaza to the U.S. Attorney's office.

"The timing for Renaissance Plaza should be right to capture the expanding interest in Downtown Brooklyn." said Markmann. Rents for Brooklyn's Class A space is in the upper $20s per square foot because of the lack of good product.