770 Broadway Friended: Facebook NYC Expanding at LEED Silver Vornado Tower

Facebook’s 100,000-square-foot lease at the LEED-EB: OM Silver 770 Broadway is the latest in a string of technology industry transactions, not all of which have closed in the ballyhooed Silicon Alley submarket.

One of 2013′s most interesting New York City commercial real estate trends has been a general exodus of technology industry companies from Midtown South. Rising occupancy rates and increasing rents have driven firms to look north – specifically in Times Square, where older buildings with lofted ceilings and large floor plates offer blocks of space at more reasonable price points.

But not every technology company is hitting the escape button on Silicon Alley, particularly if they’ve got tens of billions of dollars in market capitalization. So it’s not a surprise that Facebook has – after what appears to have been a long search effort – signed a 10-year, 100,000-square-foot lease for the entire seventh and eighth floors at Vornado’s historic, 15-story, LEED-EB: OM Silver 770 Broadway. The company will pay in the mid-$70s per square foot for its new space.

The 1.1 million-square-foot tower is no stranger to the tech and new media industries: both AOL (which earned LEED-CI for its office build-out) and Huffington Post are also based out of the tower, which was originally designed by Daniel Burhnam. Dating from 1905 as the original home of the Wanamaker Department Store, 770 Broadway spans the entire block between 8th and 9th Streets. $35 million in recent renovations upgraded its lobby, windows, and HVAC systems.

Facebook’s current NYC headquarters is at 335 Madison Avenue, between East 43rd and 44th Streets. It’s unclear whether it will keep that space – where it houses advertising and sales staff – or sublet it. But according to Crain’s, Facebook has been interested in expanding its engineering and technical staff in Manhattan for some time and was keen on space in Silicon Alley in Midtown South, despite the increase in overall occupancy rates and – of course – rents.

It’s been a busy 2013 thus far for major technology industry deals: BuzzFeed doubled its Midtown South footprint in a 58,000-square-foot sublease from Tiffany’s at 200 Fifth Avenue; LinkedIn expanded its Empire State Building presence to nearly 110,000 square feet; Yahoo!, CityGrid, and 10gen took significant blocks of space at 229 West 43rd Street; the co-working space Grind signed up at 1412 Broadway; and Microsoft closed its monster 220,000-square-foot deal at the LEED Gold 11 Times Square.

A major thread in all of these transactions (other than Facebook’s and BuzzFeed’s, of course) was the tenant looking at space in Midtown South and ultimately settling on less expensive space in Midtown. With more new office conversion projects potentially coming online in Midtown, along with continued availability of larger blocks of space, look for more tech industry deals to close north of 34th Street as we move into the second half of 2013.

about gbNYC

gbNYC is a multi-disciplinary consulting and real estate services firm. In addition to representing office tenants and commercial buyers in leasing and acquisitions, we also provide innovative consulting solutions from a unique, green building perspective. We advise on green building financial incentives, comment on proposed green building marketing strategies, author white papers, treatises, and market analyses, organize seminars on the LEED process and professional accreditation, and provide advice and analysis on green building risk management and the overall state of green real estate, leasing, and construction, in New York City and beyond.

Our blog, the gbNYC+ journal of real estate, law, + sustainability, delivers consistent, original content - from a New York City perspective - on how technology, data, and sustainability are changing how we interact with our built environment. Subscribe below and receive new articles as they're published or connect with our social media presence to join our ongoing conversation about real estate and sustainability, in the Big Apple and beyond. Contact us at (201) 835-8530 or info@gbNYC.com for more information about our services and to discuss how we can assist you.

, , , , , , , ,

No comments yet.