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 the Huffington Post are also based out of the tower, which was originally designed by Daniel Burnham. 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.
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.