Spaceworks in the News

REAL ESTATE WATCH: Venturing into the Jersey frontier

Incubator Ground Floor Ventures picks Hoboken; space for clients

By lore croghan
Published on September 11, 2000

People are starting to believe that Hoboken, long left out of the commercial development that's going gangbusters on the rest of the Jersey waterfront, is going to be a hot office venue. In fact, Shannah Whithaus is betting her business on it.

Instead of setting up shop in Manhattan, she chose Frank Sinatra's hometown to launch her new for-profit business incubator, Ground Floor Ventures. It will focus on start-up software and Internet companies that are owned or operated by women. Ms. Whithaus chose the Jersey town even though most of the entrepreneurs seeking her help are located in Manhattan.

``Hoboken has all the benefits of a big city without the drawbacks,'' says Ground Floor's chief executive, who ran a small business there before deciding to launch her incubator.

She has taken 5,000 square feet at the Monroe Center for the Arts at 720 Monroe St. and prewired and furnished it for arriving businesses. Though some of the companies she's going to work with already have offices of their own, others will need a place to work for six to eight months, until they grow big enough to leave the nest. She plans to take an average equity stake of 5% in the companies she advises.

The arts center rents space to artists and Internet firms, with the dot-coms paying higher rents to subsidize the artists. Even for the Web businesses, the asking rent is a bargain by Manhattan standards, just $12 to $25 a square foot versus midtown's heart-stopping average of $61 a square foot and downtown's $42.

The owners of the center, investors Bill Hoda and Gerard Saddel, are themselves making a bet on Hoboken's nascent office boom. They're planning an expansion that will add 125,000 square feet of office space to their current inventory of 200,000 square feet.

BANK BRANCHES OUT

Sterling National Bank is opening a branch at 622 Third Ave., the Grand Central-area skyscraper that Cohen Brothers Realty Corp. has retenanted after the departure of Empire Blue Cross Blue Shield.

The bank, which caters to Manhattan middle-market businesses, rented 9,500 square feet of ground-floor and mezzanine space.

The asking rents for retail space at the 987,000-square-foot building between East 40th and East 41st streets are $75 to $80 a square foot. The bank negotiated with the landlord without broker representation.

Sterling is relocating from nearby 355 Lexington Ave.

At this point, there are only 5,200 square feet left at 622 Third. The other new tenant that recently signed on is HypoVereinsbank. The German bank rented 35,500 square feet for its New York City office in a deal brokered by Insignia/ESG Inc.

Asking rents for office space are $55 to $60 a square foot.

TRADING UP

Broadway Trading is moving to 417 Fifth Ave., where it signed a 12-year lease for 30,000 square feet.

The high-profile day-trading brokerage is moving from downtown's 30 Broad St.

The firm is relocating to a building called the Midtown Cyber Center, which has been recently retenanted with dot-coms. Broadway Trading is paying dearly for the move uptown. The average rent over the life of the lease is $50 a square foot.

Murray Hill Properties/TCN represented the tenant in the deal.

Cushman & Wakefield Inc. represented Emmes & Co., which manages the property on the southeast corner of East 38th Street for NorthStar Capital Investment Corp.

WARP SPEED

Warp Solutions Inc., a creator of software for Internet infrastructure, signed a five-year sublease for 7,000 square feet at 627 Greenwich St. The asking rent at the West Village building is in the low $40s a square foot.

The Manhattan-based start-up is moving out of 245 Park Ave.

It's renting its new location from Mail-Well Inc., which leases the entire 110,000-square-foot building between Leroy and Morton streets for a printing company it owns, Enterprise Press Inc.

The space became available because a supplier of Mail-Well's that was subletting it moved out, says David Silberberg, principal of Spaceworks Real Estate Services Inc. Mr. Silberberg represented both players in the deal.

Another 11,000 square feet is available in the building, left vacant by a second departing subtenant.