Landlord Charles S. Cohen called it “a very hard-fought commitment” that convinced a life insurance company to uproot from downtown Manhattan and, choosing from an ardent trio of inducement-offering suitors, relocate to White Plains this fall.
While not a signal that the exodus of companies from Manhattan”™s high-priced commercial office market ”“ a suburban migration frequently predicted by real estate brokers and analysts here ”“ has begun, the move by Amalgamated Life Insurance Co. still amounts to 132,000 square feet of soon-to-be-occupied office space and an influx of more than 400 employees for Westchester County.
For Cohen, head of Cohen Brothers Realty Corp., a private real estate development and management company in Manhattan, Amalgamated will fill more than 80 percent of one of four connected four-story office buildings his company owns at 333 Westchester Ave., the former 500,000-square-foot headquarters of General Foods. The furnished space had been leased by Argent Mortgage Co., which vacated White Plains in early 2007 as the subprime mortgage market, in which it was a major lender, collapsed. Cohen hopes the insurance company”™s move here might draw other tenants to the remaining 200,000 square feet left by Argent.
Cohen in 1998 paid $25 million for the 39-acre property owned by Philip Morris Companies Inc., then the parent company of former tenants Kraft Foods and General Foods. “I”™ve been working on it for over 10 years,” he said of the property in which he has invested more than $50 million. Designed by architect Philip Johnson, the distinctive office building complex is the only Cohen Brothers Realty holding in the county.
The deal with Amalgamated was worked out over five months. “We were very aggressive and very competitive,” Cohen said. Westchester County officials joined the recruitment effort after Amalgamated showed interest in the site. “They were terrific,” Cohen said of county officials. “I don”™t believe they were instrumental” in Amalgamated”™s decision “but I do believe they were helpful in us getting it done.”
The Westchester County Industrial Development Agency recently approved $480,000 in sales tax exemptions to ALICO Services Corp., the holding company for Amalgamated Life, for construction and renovation purchases related to the move.
County IDA Executive Director Theresa G. Waivada called Amalgamated”™s move “probably one of the bigger locations in the past two years” in Westchester. “I think what made the difference here was not only our benefits but the fact that the Argent space gave them the chance to move in without doing a lot of build-out. That”™s basically it. It just made sense. The savings overall was much more beneficial to stay in New York state and come to Westchester.”
David J. Walsh, president and CEO of Amalgamated Life, last week said the company looked at relocation options within a 25-mile radius of its headquarters at 730 Broadway in Greenwich Village, where its lease was about to expire. The landlord, New York University, wanted to make use itself of the company”™s space.
The company also seriously considered locations in Newark, N.J, and lower Manhattan, where Mayor Michael Bloomberg had offered the company about $750,000 in cash to stay in the city. Walsh said the company wanted a location accessible to employees by public transportation ”“which eliminated New Jersey sites ”“ and where Amalgamated would have ample contiguous space to carry out its expansion plans. The space requirement, 125,000 to 130,000 square feet, “took out a lot of potential sites,” Walsh said. “That”™s a lot of space.”
“One of the big factors was price,” he said. In Manhattan, the rent “would be fairly heart-stopping.” At 333 Westchester Ave., where asking rents per square foot are in the high $20s, according to one real estate consultant here, Walsh said Amalgamated expects to save 30 percent in rent costs over the course of the 16-year lease compared to Manhattan. And construction costs in the former mortgage-company space will be only “a fraction” of what they would have been at other locations.
“The decision to leave Manhattan was not one that we made lightly,” said Walsh, whose company was founded there in 1943 to serve labor union members in the city”™s textile and garment industries. “It was balancing all of those factors.”
Walsh said the company expects to have about 450 to 470 employees in White Plains and will subsidize any additional public transportation costs they incur with the move. He said a little more than 5 percent of Amalgamated”™s current work force, or 25 to 27 employees, have chosen not to relocate. The company this week will bus workers in shifts to White Plains “to really try incentivizing people to give it a shot,” he said. Amalgamated will begin its move on Oct. 23.
Howard E. Greenberg, president of Howard Properties Limited in White Plains, said the Amalgamated relocation “is the first significant move out of the city in a while,” even though Manhattan rents have not “softened” and still can range from $80 to more than $100 per square foot. “Anything over 50,000 feet in this county, in a year you can count on the fingers of two hands ”“ and probably have fingers left over,” he said.
The Amalgamated move, said Westchester developer Robert P. Weisz, “is not a sign that everything”™s moving to Westchester but it is a confirmation that this is a very solid market.”
