With REIT Conversion Still Pending, Shutterstock Makes Move to Empire State Building

As Malkin Holdings moves forward with its plan to convert ownership in the Empire State Building into a publicly traded REIT, the image licensing company Shutterstock has signed an 80,000-square-foot lease across two entire floors at the iconic tower.

The image-licensing company Shutterstock is on the move to the Empire State Building. The technology startup has signed a lease for more than 80,000 square feet across two entire floors. After hiring 50 new employees once it went public last October, Shutterstock maxed out its existing office space at 60 Broad Street. The company is the latest in a string of tech industry deals both at the Empire State Building (where LinkedIn expanded its footprint last summer by nearly a third) and elsewhere in Midtown. From 1412 Broadway in the Garment District to 229 West 43rd Street in Times Square, technology industry tenants continue to look at 34th Street and above for the flexible floor plates, office arrangements, and asking rents that continue to be tough to locate in Midtown South.

Still, asking rents at the Empire State Building have hovered in the $51 to $55 per square foot range even in the aftermath of Malkin Holdings’ 3-year, $550 million upgrade to the tower’s infrastructure, offices, and exterior lighting, which has yielded dual LEED-EB: OM Gold and Energy Star certification and also upgraded all 6500 of the 2.9 million-square-foot tower’s windows and modernized its 68 elevators. “We’ve been growing, and what we want is a more collaborative, open environment,” Shutterstock CEO Jon Oringer told the Wall Street Journal, which first reported the deal last week.  “We were looking for really big floor plates, but if you want to go around there [in Midtown], you’d have to look at three or four floors to get the same amount of space.”

Shutterstock’s lease comes while Malkin Holdings continues to try and convert ownership in the Empire State Building into a publicly traded real estate investment trust (REIT). Nearly two-thirds of the limited liability company’s unit holders have already voted on the conversion plan (which has preliminary court approval from New York County Supreme Court Justice Peter Sherwood). Malkin is pushing unit holders to continue voting in favor of the conversion to avoid continued litigation costs and other expenses while the REIT is still pending. An outcome on the vote could come as early as this month.

About Stephen Del Percio

Stephen Del Percio has written for gbNYC+ since 2006 and currently serves as in-house counsel for one of the world's largest engineering, construction, and technical services companies. He earned a B.Eng. from Columbia, his J.D. at William & Mary, and lives in New York City with his wife and daughter. You can follow Stephen on Twitter, email him at stephen@gbNYC.com, or join gbNYC on Facebook to continue the conversation.

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  1. Connecting with 100K: LinkedIn Continues to Expand at Empire State Building – insiderater.com - Thursday, May 9, 2013

    [...] 25th floor: joining LinkedIn are Li & Fung USA, the FDIC, Coty, the World Monuments Fund, and Shutterstock. Asking rents above 25 are in the mid-$50s per square foot, with a full block of floors from 55 to [...]

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