Movable Ink has subleased the fifth floor of 636 Sixth Ave. Stephen Remich for The Wall Street Journal

Vanderbilts to Renovate Art Deco Tower on Madison

Descendants of Cornelius Vanderbilt III are in control again of an Art Deco tower in the Plaza District after an 84-year leasehold expired and are investing about $40 million in renovations to attract a wider mix of tenants, according to leasing agents.

The 30-story building, at 501 Madison Ave., was developed in 1929 on land owned by Mr. Vanderbilt, and the railroad and shipping scion entered into a long-term leasehold, said Alex Jinishian, a vice chairman at Colliers International and a member of the property's leasing and management team. The property has stayed in the family over the decades.

"It's pretty unusual where the owners decide not to re-lease it and not to sell it," Mr. Jinishian said.

The leasehold ended last May; since then, the ownership group—several family members who declined to comment through Mr. Jinishian—decided to make improvements to the structure.

Expected to be completed by summer, the renovations include: a new facade for the first- and second-floor retail space, a new building entrance and lobby, new elevators, revamped common areas, new windows, a new cooling tower and electrical-system upgrades.

Asking rents are $58 to $80 a square foot, as much as 33% more for some tenants before the renovations, Mr. Jinishian said.

The improvements have attracted new businesses to the tenant base of mostly financial services and law firms. Now, the building houses jewelry and fashion showrooms as well as the offices of jewelry manufacturer Oscar Heyman Inc. High-end Italian shoe and accessory designer Carlo Pazolini also has signed a 2,973-square-foot lease for offices and a showroom.

"Some of the work we are doing is we are leaving open space with exposed ceilings," said Seth Hecht, a director at Colliers International. "This is attracting showroom-type of tenants in jewelry and fashion design."

—Keiko Morris

Expanding Email Company Moves for Third Time

Email marketing company Movable Ink is growing so quickly that it has just changed offices for the third time in less than two years.

The firm—its technology allows email to become responsive in real time and lets customers modify messages after they have been sent—is now subleasing the full fifth floor of 636 Sixth Ave. in the Flatiron district; the total number of square feet is 13,000.

"After outgrowing our two previous spaces, Movable Ink was in the market for an office that could accommodate our rapidly growing staff," said Vivek Sharma, CEO of Movable Ink.

Elliot Warren, leasing director at The Kaufman Organization, represented Movable Ink; Jim Wenk of Jones Lang LaSalle represented the sub-landlord, SecondMarket, a trading platform. The terms of the lease weren't disclosed.

Built in 1902, the class-A, six-story building is owned by Macklowe and Company.

Other tenants include SecondMarket and Sequence; Sports Authority occupies the retail space on the ground floor.

Of Movable Ink's previous office locations, Mr. Warren said: "All of their offices have been within a three-block radius. They started on 20th and Broadway and then went to 5 W. 19th St. and now they're on the same block in the new space.

"It was already furnished, it has an open layout and a dedicated IT and server room, and it's exactly what tech tenants are looking for."

Moveable Ink wanted to stay in the neighborhood because it is also home to other technology companies such as Twitter, Spotify, Mashable and the incubator space WeWork, Mr. Warren said.

—Carmel Melouney

Demolitions, Conversions
Gobble Up Class B Space

Affordable housing advocates have long lamented Manhattan's lack of cheap apartments. Now, the borough's cheaper office space is disappearing as well, according to a study by Jones Lang LaSalle Inc.

Class B office space declined 11% from 1995 to 2014 as a result of demolitions, residential conversions and upgrades, the commercial brokerage reported.

Downtown had the biggest drop in Class B space—30% since 1995. The area near Wall Street has been a hotbed of office-to-residential conversions.

The Woolworth Building, at 233 Broadway, will soon have condos in its upper floors, and the former headquarters of American International Group Inc., at 70 Pine St., is in undergoing a $550 million residential conversion.

Today, downtown's Class B vacancy rate is below 10% and companies seeking lower price points have fewer options such as downtown Brooklyn or Long Island City, Queens, said John Wheeler, managing director of Jones Lang LaSalle.

Fewer Class B properties also helped boost the market's overall asking rents, which hit a four-year high of $61.75 a square foot in the fourth quarter of 2013, according to Reis Inc.

"Buildings that were converted didn't warrant office reinvestment," said Mr. Wheeler. "They were really a drag on the market overall because they could only compete on the basis of price."

Major new office developments, including the World Trade Center and Hudson Yards, have Class A office space that caters to large corporations and high-end tenants.

—Roland Li