It’s a deal that’s been in the works for some time. But today SJP Properties formally announced that Microsoft will be moving out of 1290 Avenue of the Americas and taking 230,000 square feet at its LEED Gold-certified 11 Times Square trophy tower at the corner of 42nd Street and 8th Avenue. That Microsoft was kicking tires around town has been the industry’s worst-kept secret over the past few months. And at 11 Times Square, delays were rumored to range from discussions over signage rights and financing to Vornado making a strong push to keep Microsoft on Sixth Avenue. But in the end, Microsoft’s deal will stretch for 16 years on floors 4 through 11, in the low $60s per square foot (notably, significantly lower than what asking rents had been even through the downturn).
Certified Gold under LEED for Core and Shell, the 40-story, 1.1 million-square-foot 11 Times Square was the first commercial building developed in Manhattan by New Jersey-based SJP Properties. Timing hasn’t been on the developer’s side – the tower opened in the aftermath of the 2008 credit crunch – and it took SJP nearly two years to land Proskauer Rose as its anchor tenant. Early in 2012, the first retail tenant – a 25,000-square-foot restaurant concept – signed up. But successfully wooing Microsoft – which had considered downtown spaces, as well as Boston Properties’ 250 West 55th Street – is a major victory for the developer, which had projected a great deal of confidence to the industry even as the tower stood mostly vacant. Still, $60/square foot is significantly less than the triple-digit rents that SJP had at one time sought – so it’s a great deal for Microsoft as it relocates into a brand-new, state-of-the-art Class A building.
“The lease reflects Microsoft’s commitment to establishing its presence within Manhattan’s foremost transit hub location,” the company said in a press release. “[It] also demonstrates Microsoft’s focus on providing its employees with a high-performance, technologically superior work environment. This building is managed like a five-star hotel and is complementary to Microsoft’s identity as a global leader in the technology sector. The benefits to the company and its employees of occupying a building that offers the location and energy-efficiency advantages of 11 Times Square are significant and will have an immediate, positive impact on its business.”
“Microsoft’s decision to lease space at 11 Times Square is another significant sign that this building is being targeted by top-tier global firms looking to maintain their competitive edge by locating within transit hubs that provide unparalleled access and convenience to their employees, clients and customers,” Steve Pozycki, CEO of SJP Properties said in the same release. “Situated in one of the top transportation centers in Manhattan, 11 Times Square delivers numerous location advantages. When coupled with the tower’s superior technology, safety and robust energy-efficiency features, this tower promotes an enhanced quality of work life and employee productivity, and we are pleased to deliver on that promise for Microsoft.”