FDIC Terminates First Republic Bank’s Hudson Yards Lease
The Federal Deposit Insurance Corp. (FDIC) has terminated First Republic Bank’s lease for its large office space in Hudson Yards, according to reports. The lease, covering 212,000 square feet of office space at 410 10th Ave., was terminated following the bank’s failure earlier this year. The property is owned by 601W Cos., who confirmed the termination. JPMorgan Chase, which acquired most of First Republic’s assets, did not occupy the space and it has now been handed back to the landlord.
Background and Termination
First Republic Bank had pre-leased the Class-A office space at 410 10th Ave. in 2019 from SL Green. The property underwent a significant $240 million renovation before Amazon became its largest tenant, occupying 330,000 square feet until 2037. 601W Cos. purchased the building in December 2020 for $953 million, with JPMorgan Chase providing a $705 million debt package for the acquisition. The FDIC took possession of the lease in September and has since been working on a termination agreement with 601W Cos. The termination went into effect within the last 10 days.
Impact on Building and Market
Despite the termination, the building at 410 10th Ave. remains cash flow-positive, even without the rent from First Republic. The landlord has already started conversations with potential tenants to occupy the space vacated by the failed bank. The building is being marketed by JLL. Other tenants in the building include bakery Maman and Hudson Yards Construction LLC. Rents in the Penn Station submarket, where the building is located, have increased since the start of the pandemic, indicating a strong demand for office space in the area.
Future Prospects and Market Conditions
The termination of First Republic Bank’s lease highlights the ongoing aftermath of regional bank collapses. In this case, the FDIC took over the lease following the bank’s failure, and the property has been returned to the landlord. While this may be a setback for the building, the Hudson Yards area continues to attract tenants, with increasing rents and demand for Class-A properties. The termination presents an opportunity for other companies to lease the desirable office space in this prime location.
Frequently Asked Questions
What happened to First Republic Bank’s lease at Hudson Yards?
The FDIC terminated First Republic Bank’s lease for its office space at 410 10th Ave. in Hudson Yards following the bank’s failure earlier this year.
Who owns the building where the lease was terminated?
The building at 410 10th Ave. in Hudson Yards is owned by 601W Cos., who confirmed the termination of First Republic Bank’s lease.
What is the impact on the building and the market?
Despite the termination of the lease, the building remains cash flow-positive. The landlord is already in talks with potential tenants to occupy the space left by First Republic Bank. The Hudson Yards market continues to show strong demand for office space.
Are there other tenants in the building?
Yes, the building at 410 10th Ave. has other tenants, including bakery Maman and Hudson Yards Construction LLC.
What are the market conditions in the Hudson Yards area?
Market conditions in the Hudson Yards area have been positive, with increasing rents and demand for Class-A properties, indicating a strong market for office space in the area.
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