Case Study

1199SEIU National Benefit Fund

Finding a Home to Service 400,000 Union Members

May 1, 2017

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Overview

1199’s headquarters building was literally falling apart around them. An absentee landlord, who acquired the building 25 years prior out of bankruptcy, was attempting to force 1199 into a long-term extension while passing through more than $30 million in deferred maintenance via building operating expense escalations.

With over 400,000 members, any relocation alternative had to satisfy both the 1199SEIU United Healthcare Workers East (the “Union”) and 1199SEIU National Benefit Fund for Health and Human Services Employees (the “Funds”), each with their own agenda, priorities and representation.

Over the better part of a decade, CBRE worked alongside 1199, first as a consultant to help the Funds independently evaluate their situation and, ultimately, to negotiate a relocation of 1199’s headquarters into a new, fully-modernized “building within a building” at 498 Seventh Avenue.

  • 575,000

    Total Square Feet

  • HQ

    Relocation

  • Winner

    of REBNY Deal of the Year Award

  • Distinct

    Building Within a Building Designed by Sir David Adjaye

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498 Seventh Avenue. Image courtesy of James Hooker/CoStar.
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Member facing private entrance. Mosaic emblazoned with Frederick Douglas’ words.
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Double Height entrance honoring Dr. Martin Luther King, Jr. Designed by Sir David Adjaye.
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Pre-function space with mosaic depictions of historic organizational efforts.
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Member facing reception.
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Dedicated employee entrance experience. © Gensler/Robert Deitchler
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Collaboration and event spaces. © Gensler/Robert Deitchler
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Member facing benefit support and administration. © Gensler/Robert Deitchler

The Solution & Result

  • One early challenge was to align 1199’s non-coterminous lease expiration dates, something their absentee landlord had been unwilling to consider until CBRE developed a credible relocation threat for the expiring portion of their operations in the form of an immediately adjacent, short-term, built alternative.
  • CBRE, coordinating with Union representation, built consensus on a relocation strategy for both the Fund and the Union that maintained their independence (e.g., each entity has a distinct private entrance) while also respecting their essential foundational bond.
  • CBRE negotiated a detailed, extensive building modernization program backed by significant non-performance penalties to ensure 1199’s timely exit from their existing building.
  • Created a “building within a building” with retail-style access for Union members via a private entrance on Seventh Avenue; designed by world-renowned architect Sir David Adjaye.
  • The combined organizations expect to realize a collective savings of $400 million over the 30-year lease term.

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