Third Street. It’s unlikely to be an investor hot spot as Manhattan’s prime downtown rents

Third Avenue was never the first for tenants. But as Class A office space rises along Fifth, Sixth, Madison and Park streets rent to capacity, Third is becoming a respectable finish.

“Suddenly there’s a new focus on Third Avenue, not just from landlords, but from tenants,” said Dan Shannon, an architect who directs MdeAS. “We studied one for a residential conversion that looked really good and during that study it started to be re-let as a commercial office building.”

And while companies moving east may sacrifice location, they’re getting lower rents and higher floors with better views in return. “The fact is that all the buildings in Park and Madison that are often the most desirable, not only are they seeing rents that are higher, but the availability is mostly only on the lower floors,” said Adam Henick of Current Real Estate Advisors.

Some Third Avenue towers have ready-to-let pre-built offices up to 2,000 square feet, as well as high-rise blocks from 60,000 square feet up to 200,000 or even 500,000 square feet.

In fact, apart from the two largest office buildings – Vornado’s No. 909, with 1.34 million square feet and floor tiles of about 34,000 square feet; and SL Green’s No. 919, with 1.5 million square feet — Shannon says the rest are “right-sized” for accounting, law firm and healthcare office use at 500,000 to 800,000 square feet.

Adding to the desirability, a number of renovations have recently been completed or hit the road: at BentallGreenOak’s Nr. 685; SL Green’s Lipstick Building at No. 885; Sage Realty’s No. 777; and Waterman Interests and HPS Investment Partners’ $60 million overhaul of No. 850.

The Durst Organization also owns a number of towers on Third Avenue. It has injected 150 million dollars into No. 825 adding dynamic-looking windows that automatically adjust to sunlight, new building infrastructure and retail storefronts, along with a new lobby and hospitality-focused building amenity with an enclosed outdoor terrace on the ground floor the 12th.

Durst also owns and has renewed the No. 675, which has a green zinc wall, as well as No. 733 and 655, both of which have green roofs and exclusive tenant terraces.

Nuveen, which is the investment arm of TIAA, spent $40 million to renovate and rename Skidmore, Owings & Merrill No. 780 in “Gardens of 780”.

It was sold in July for $177 million, or $350 per foot, to Cyrus and Darius Sakhai’s Sovereign Partners.

It has a distinctive Scandinavian red granite facade and a plant-filled lobby along with a wellness centre, a 154-seat theater and a conference centre. Now, the site boasts future amenities, including a golf simulator, a pickleball court, a sauna and a cold plunge pool. Spaces in the 50-story tower range from just 1,973 square feet to nearly 11,000 square feet.

“The market is realizing the benefits of all the money invested in the asset and the unique nature of its column-free slabs,” said letting agent Paul Amrich of CBRE. Asking rents there range from $68 to $90 per foot.

Love working on Third Avenue so much you never want to leave? Good deal. A small number of buildings are also being converted for housing. The owners of 830 Third have pulled 130,000 square feet off the market to create 188 residential apartments. Quantum has teamed up with Metro Loft Management to return No. 767, which he bought from Sage; Rudin is looking for a conversion for No. 845; while SL Green expects to spend $805 million on the No. 750 to convert it into 639 apartments.