Midtown tower leases show renovation capital wins tenants

Three tenants at The Swig Company's 1411 Broadway have committed to more than 182,000 square feet in recent deals, the clearest sign yet that the tower's $100 million renovation is beginning to write itself into the rent roll, and after an 18-month leasing flurry Connect CRE expects occupancy to reach 90 percent by year-end.

Zeta Global, a software company, is doubling its footprint and relocating its headquarters across the entire 38th and 39th floors, while South Korean beauty and cosmetics group Amorepacific is moving its headquarters from 1407 Broadway, each on 10-year, 50,500-square-foot headquarters leases. Republic Clothing Corp., a current subtenant in the building, is converting to a direct lease across three floors for 81,000 square feet over 15 years, with CBRE representing ownership in the transactions, according to Connect CRE.

The capital improvement program behind that burst includes a new entrance and facade, a renovated Broadway plaza, and other upgrades, with a rooftop amenity space slated to open in early 2028. For the office sector, the tower is a clean test of whether renovation capital, not just location, is determining which buildings win tenants.

Office recovery has been splitting between trophy product and commodity stock, and 1411 Broadway is a third bucket: the building has bought its way into the trophy conversation with $100 million of work. The tenant response reads as an instruction to owners elsewhere: spending on the asset, rather than waiting for the market to come around, is the trade that clears. If these leases hold, the next Midtown comps get priced on what owners spent, rather than what the building once was.