Park Avenue: From Social Aristocracy to Soap Aristocracy

by | 01 June 2016

The Helmsley Building, built in 1929 between 45th and 46th Streets in Manhattan as the ‘New York Central Building,’ straddles Park Avenue. And 250 Park Avenue, which was built in 1924 as the headquarters of General Foods, sits catty corner on 46th Street. The two structures were the northern-most office buildings on the avenue until after World War II. But in 1943, when rents had dropped drastically from their pre-Depression heights, a new phenomenon hit New York City residential real estate: rent control. A consequence of this new policy was the emaciation of the high-end Park Avenue residential market immediately north of Grand Central. Simply speaking, much more could be earned from office buildings, so the face of Park Avenue underwent a drastic change.

Plus: Eleventh Avenue: Manhattan’s last frontierThe Queen of England and Lower Manhattan

Developers seized the day and erected many cookie-cutter buildings in place of the noble residential buildings that had lined the avenue between 46th and 59th Streets. For example, the original 425 Park Avenue (1954-57), described by some as “crudely detailed,” replaced a row of brownstones. It’s now being redeveloped, and a hedge fund just signed a lease where the penthouse space commands the highest rent in New York: $300 per square foot.

425 Park Ave

425 Park Avenue – Original Building. Image credit: CoStar

425 Park render

Rendering of New 425 Park Avenue. Image credit: CoStar

Not to worry—there’s still space on Park Avenue available a lower rent, including the iconic Seagram Building at 375 Park (between 52nd and 53rd Streets) and its diagonally opposite and grand predecessor, 390 Park, also known as Lever House, where a new space can be had from RFR Holdings for a rent as low as $175-$180 per square foot. If you search carefully, there are also two-figure rents available between 46th and 59th Streets.

Lever House

Lever House in 2016

When the design of Lever House was first released in April 1950, Architectural Forum wrote: “Now at last New York is getting … a tower built on pride and the desire to build a name rather than the chance for a quick profit.” The building’s revolutionary modern design, which was created with full input from the soap magnate Lever Brothers, elicited many pro and con comments in the architecture community. But trouble soon set in with the initial materials, and the glass panels were replaced one by one until it was only a shadow of its original luster. When RFR bought the leasehold in 1998, it had to perform a multi-million-dollar renovation, and the building now looks more like its eminent original self.

But when the Ludwig Mies van der Rohe-designed Seagram Building was finished in 1958 it opened to, and has subsequently received, much more praise. In an article titled “The Lesson of the Master,” well-known architectural reviewer Lewis Mumford wrote of the building, “It is everything that most of the office buildings that have been going up in midtown area in the last few years are not.”

Seagram Building

Seagram Building in 2016

RFR owns the Seagram Building outright, but they are the long term lessees of Lever House under a ground lease that runs through December 2098. A new 99-year lease was entered into by the owner of the fee simple and RFR. It’s interesting that the lease allows for a reset of the ground rent in 2023 based on fair market value, and negotiations on that rent are due to start in 2019.

Of course, there are other buildings on this stretch of Park Avenue that have undergone renovations: 320 and 280 Park quickly come to mind. But more than half a century after they were built, Lever House and the Seagram Building still stand out from the rest.

 

A lawyer by training and background, Richard is Executive Director of Colliers International in New York. For the last 20 years he has advised corporate tenants globally on how to avoid the pitfalls that landlords lay in store for them. When not working with clients or thinking of innovative ways to assist them, Richard spends his time immersed in history, theater, travel and reading.