The sad plight of the office real estate market continues with all but the most well-adorned offices stuck with stubbornly high vacancy rates. The first thing that comes to mind when imagining the best of the best in office accommodations is not a 60-year-old building originally developed for a long-defunct airline, but that is precisely what Midtown Manhattan’s MetLife Building continues to be in the eyes of occupiers: the best of the best. The iconic high-rise has, under the ownership of Tishman Speyer and The Irvine Co., continued to evolve to hold onto its place as one of the most coveted office destinations in New York City. The numbers tell the story. As of mid-August 2023, this 3.1 million-square-foot office and retail property offered a mere 100,000 square feet of office space available for sublet.
The skyscraper at 200 Park Ave., which features roughly 2.8 million square feet of rentable space, including more than 100,000 square feet of ground-level retail space, and a 250-vehicle parking garage, was a trailblazer from the start. Construction of what was to become the Pan Am Building commenced in 1958 in the air space above Grand Central Terminal, and when the $100 million building delivered in 1963, it held the distinction of being the largest office facility in the U.S. in terms of square footage. Architects Emery Roth & Sons, Pietro Belluschi, and Walter Gropius designed the 58-story high-rise in the International style, often described as the “anonymous glass box” style for its deliberate lack of ornamentation, producing a head-turning structure with an elongated octagonal exterior of glass and pre-cast concrete.
Ownership of the Pan Am building changed hands in 1981, when Metropolitan Life Insurance Co., a headquarters tenant of the building, acquired the property from Pan Am in a $400 million transaction. MetLife invested over $90 million in renovations at the property during its ownership, performing everything from a restoration of the facade to a comprehensive redesign of the building lobby and entrances. Fast-forward to 2005, a Tishman Speyer-led consortium that also included The Irvine Group purchased the property for approximately $1.7 billion in what was then the most expensive office trade in the U.S.
The lending community has been keen on the MetLife building over the years, likely due to the property’s consistently high occupancy levels and solid sponsorship. The Tishman partnership purchased the high-rise with the assistance of a $900 million mortgage loan from Lehman Brothers. Ten years later in 2015, Tishman et al landed $1.4 billion in refinancing for the building courtesy of an interest-only loan from Wells Fargo and Bank of America. A welcoming lending climate, strong sponsorship, and a 99-percent leased building certainly alleviated any hesitation among the banks, but it’s not every day that an old office building can secure those kinds of funds. It was during this time that the ownership balance became clear. Irvine had increased its position in the property over the years and by 2015, the company held a 97.3 percent interest in the MetLife Building, leaving Tishman with a 2.7 percent stake.
Regardless of who owns how much of the MetLife Building, Tishman and Irvine have been united in their ongoing vision for the property. In 2018, the partners announced a renovation program that would take the property up even higher on the Class A scale. With the help of MdeAS Architects, the ownership reimagined the building’s 50,000-square-foot, two-story lobby by not only updating its technology but also restoring the space to its original splendor with the use of such classic materials as travertine, terrazzo, bronze, and wood. The lobby renovation also reopened the previously closed original passageway between Grand Central and 45th St., thereby adding some clarity and convenience for the more than 250,000 commuters using the lobby to reach the terminal every day.
That was just the beginning. Tishman & Irvine have continued to invest in updating this classic property to appeal to the needs of today’s occupants. The tower achieved LEED certification in 2019, which is no simple feat for a structure built in the early 1960s. It also caters to the growing focus on wellbeing with its 15,000-square-foot fitness and wellness facility. And the company has set its sights on revealing more amenities this summer, including the 12,000-square-foot 8th Floor Skyline Terrace + Lounge, which will be one of the largest private outdoor spaces in Manhattan. A Skyline Meeting & Events center will also take shape, providing staffed auditoriums, event space, and conference rooms.
From the lobby to the rooftop and points in between, The MetLife Building is giving the people what they want: collaborative spaces, top-of-the-line amenities, sustainable features, and a highly transit-oriented location. The building and its owners prove that an office property doesn’t have to be a product of the 21st century in order to be cutting-edge and it makes the case while maintaining the building’s classic features that make it unique. Again, the proof is in the pudding, as office users continue to seek out the asset as a place to call home. Earlier this year, the Government of Ireland inked a 43,100-square-foot lease at the building, claiming the 17th floor for the Consulate General of Ireland New York to occupy after roughly two decades of maintaining its address on the 17th floor of 345 Park Ave. And just weeks ago in mid-August, insurance broker NFP announced it would abandon its home of 15 years at 340 Madison Ave. for a 30,000-square-foot space on the 32nd floor of the MetLife Building.
Something right is happening at the Met Life Building. While the rest of the office sector continues to struggle with grim numbers—including a New York City vacancy rate that increased quarter-over-quarter to 16.7 percent in the second quarter of 2023 and year-to-date negative absorption totaling half-a-million square feet, according to JLL—the six-decade-old MetLife Building is welcoming new tenants. The success of the office destination proves the adage that age is just a number and serves as a prime example of how an office property can institute the changes necessary to survive and even thrive during a severe downturn in the sector.
