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New Life at 42nd & Sixth – Steve Cuozzo

There are signs of life at last for long-aborning plans to burnish the hit-and-miss south blockfront of West 42nd Street between Sixth Avenue and Broadway.

There are signs of life at last for long-aborning plans to burnish the hit-and-miss south blockfront of West 42nd Street between Sixth Avenue and Broadway. Blackstone, which owns the office tower at 1095 Sixth Ave., has finally filed demolition plans for 124 W. 42nd, the vacant five-story building it also owns.

Taking down the eyesore will make way for the retail glass box we first previewed in these pages early last year, parallel to the new public plaza between 1095 Sixth and the empty structure.

Meanwhile, two doors west, Highgate Holdings has begun test borings at the vacant lot that will become a new hotel adjacent to the landmark 1466 Broadway, the former Knickerbocker Hotel, which will be converted back to a hotel after years as a Class-B office address.

Highgate has a contract to sell the new hotel at 136 W. 42nd -- which will have between 250 and 400 rooms, depending on acquiring certain development rights and permissions -- to Diamond Rock Hospitality.

Although an earthmover was pounding away at the site yesterday, Highgate has yet to file plans for the new building. The company’s New York manager, Vijay Raina, said, “The building is still being designed, and we do not have a start date yet.”

According to Diamond Rock’s latest 10Q filing with the Securities and Exchange Commission, it’s in contract to buy the new hotel from Highgate when it’s completed. The project is to contain at least 285 guest rooms, for which Diamond Rock would pay $128 million -- but the number could rise to 400 rooms, in which case the purchase price would swell to $178 million.

Cushman & Wakefield’s Bradley Mendelson is handling retail leasing at 1095 Sixth as well as in the new glass structure to replace 124 W. 42nd and also in the new hotel.

It isn’t the biggest recent deal at the Empire State Building, which Malkin Holdings brought back to life with a vengeance -- but it is surely among the most clever.

Walgreens, which has a 20,000 square-foot store at the Fifth Avenue and 33rd Street corner, has swapped its 10,000 square feet in the concourse for about the same amount on the second floor.

The upper level will have a dedicated entrance for visitors to the iconic tower’s Observatory, so they can pop into the store on their way down.

The second-floor entrance will allow Observatory visitors to “satisfy their needs before they head back out into the city,” the landlord said.

Meanwhile, Malkin will convert the former below-ground drugstore space into a fitness center for building tenants only.

Malkin Holdings President Anthony Malkin said, “I talked to Walgreens over 18 months ago. I told them, ‘There’s a vacant Chase bank branch right above you, and 4 million people a year from the Observatory walk right by it.’ Now the Walgreens people are really pumped up about it.” The existing Walgreens at the site has a dowdy look, similar to an older, not-yet-updated Duane Reade. Since Walgreens acquired the latter chain, the glamorous new Reades seem classier than the Walgreens stores that once mocked them. The reconfigured and redesigned Empire State outlet will presumably address that issue. Meanwhile, Malkin said about 500,000 square feet of the tower’s total 2.9 million feet remain available, much of it in a single block of 250,000 square feet. He said he’s been signing office leases in the high $40s to low $60s.

The largest tenants are Li & Fung’s US division UF USA and Coty -- a far cry from the old mix of shoe wholesalers and dentists.

Once again in growth mode, hot sportswear designer Tory Burch is adding 26,000 square feet at 11 W. 19th St. That growth comes on top of her 26,000-square-foot addition last January.

She’ll have a total of 78,000 square feet at the address when the new lease takes effect next March.

Savitt Partners President Bob Savitt, an owner of the 280,000 square-foot prewar property, negotiated in-house; Cushman & Wakefield’s Don Preate and Jamie Katcher repped the tenant.

Freedom Specialty Insurance Co., a subsidiary of Scottsdale Insurance, has expanded from 13,000 square feet to 32,000 square feet at Larry Silverstein’s 7 World Trade Center.

Of the 5-year-old tower’s 1.7 million square feet, 1.5 million are now leased. No word on terms, but other recent deals there have reached $70 a square foot.

Silverstein Properties honcho Jeremy I. Moss said, “With this building nearing full occupancy, potential tenants are now looking to 4 World Trade Center, which will open in just two years.”


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