501 Seventh Avenue

Why is a 13,000-square-foot lease so extraordinary? Just this: with this lease, 501 Seventh Avenue — which only two years ago was languishing with an occupancy rate of less than 40% — is now virtually full, with its 460,000 square feet occupied by solid, creditworthy tenants.

"The rapid and spectacular transformation of 501 Seventh Avenue, from a poorly run, also-ran building into a garment center showcase property that attracts top-line tenants, powerfully demonstrates the success of our redevelopment and W&H branding program," says Anthony E. Malkin, President of Wien & Malkin Supervisory Services. "Proactive new management, turn-key leasing, new capital investment, and success-obsessed supervision have demonstrated to tenants and brokers that W&H delivers on the quality and cooperation the brand represents. Our motto, 'We perform for you,' applies to the leasing of the entire W&H portfolio."

Warnaco's World Headquarters

501 Seventh is the world headquarters of Warnaco Group, which now occupies close to 190,000 square feet. Warnaco's brands include such household names as Calvin Klein and Chaps, as well as leading swimwear lines like Catalina and Nautica.

Warnaco was quickly followed by leases with such major apparel industry players as Gottex, Raj, and LSV Worldwide, as well as tenants from a wide range of other industries — all attracted to the promise of property improvement and the quality of ownership and new management.

The branding program for W&H Properties, which includes The Lincoln Building at 60 East 42nd Street, 250 West 57th Street and 1359 Broadway (as well as the International Toy Center until its recent sale), followed successful litigation to remove prior longtime property management. With legal proceedings over, Wien & Malkin Supervisory Services was able to move forward on the repositioning strategy — under the newly created brand of W&H Properties. The strategy included major capital improvement programs, and the hiring of three of the nation's leading real estate services firms to implement the W&H leasing and management models.

At 501 Seventh, that assignment went to CB Richard Ellis. Working closely with ownership, the new management immediately pursued Warnaco, which was planning to relocate to modern space where it could consolidate its headquarters, showrooms and various brands and divisions. In fact, Warnaco's senior managers already had asked for leases in another building, when a team headed by Anthony Malkin and CBRE's Scott Pudalov convinced Warnaco's brokers, Newmark Realty, to give 501 a chance to outperform the competition.

"It was an amazingly bold stroke," recalls Fred C. Posniak, Senior Vice President, Wien & Malkin Supervisory Services. "Our team took Warnaco management in hand and showed them how 501, with its great "bones" and proximity to transportation, could provide all the space and technology enhancements they needed, and that ownership was committed to a total building upgrade to make 501 a building they could be proud to call their international headquarters.

Benefiting Investors

"In a matter of a few weeks, a deal that was headed to another building had become a reality," says Mr. Posniak. "And that was the first ray of light for 501 Seventh Avenue in over 20 years."

"The turnaround at 501 illustrates the enormous power of proactive asset management combined with the reputation we have created for the W&H Properties portfolio to produce outstanding benefits for our investors," says Mr. Posniak. "Tenants and brokers know we're there for them, and we intend to take every opportunity to reinforce that message."