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IT WAS THE MOST SOUGHT after office location in town, a place that could come into prominence only in a seriously overheated real estate market.
With astute timing and more than $20 million in renovations, investor Mark Karasick and his partners turned the decrepit industrial property on out-of-the-way 11th Avenue and West 26th Street into a mecca for the darlings of the new economy.
"It was the place to be, Chelsea's big think tank, a place of good ideas and great technology," says Richard Kennedy, a senior director at Cushman & Wakefield Inc.
The Starrett-Lehigh Building still has all the same virtues to recommend it: wide-open, easily wired floors brightened by natural light and stunning views from wraparound windows, and a core tenancy of stylish art, photography and fashion businesses to keep company with, including none other than Martha Stewart.
Wide-open spaces
But now Manhattan office leasing has gone cold, and almost no building is colder than Starrett-Lehigh. Mr. Kennedy has almost 40,000 square feet of sublet space on his hands to find takers for-part of more than a half-million square feet of space that's become available in the Depression-era landmark. That's a quarter of the 2.2 million-square-foot building, which was all but 5% rented just two years ago.
Another 95,000 square feet will soon be added. Insurance giant Zurich North America, a post-Sept. 11 refugee from downtown, is returning to 1 Liberty Plaza.
The extra space is a lot even for Chelsea, which has Manhattan's highest vacancy rate, 16.5%,...