On the first day of March, Havas chief executive officer David Jones joined a conference call and webcast with the press to announce his company’s 2011 financial results.
For Havas, a French marketing services group owned by billionaire Vincent Bolloré, the year was a good one. Its revenue grew 5.4 percent to $2.2 billion, 23 percent of which came from digital and social media activity.
Then, the English businessman told the media and, in effect, the world that beginning on Sept. 1, Havas would be rebranding Euro RSCG, the largest firm in Havas’s portfolio, as Havas Worldwide.
The rebranding was about efficiency, integration and consolidation.
“We have a simple structure and we want to show that we are better integrated than our competitors as well as being more agile and fleet footed,” said Mr. Jones at the time.
In addition, Havas would continue to merge its media and advertising operations in nearly all its cities of operations, from Paris to Chicago, together under the same roof.
Putting both groups in the same office would offer “cross-fertilization” opportunities while also allowing all firms to share back-office functions, a person close to the company said.
Havas made such a move at Le Madone tower, a Parisian office building the firm bought for 152 million euros, or $197.6 million, from UBS Global Asset Management’s real estate unit in September. The shift to the tower, located in the suburb of Puteaux, was initiated to bring both the Euro RSCG and the Havas Media companies together to form its new French headquarters. The move would also reportedly save the firm 20 million euros a year on rent expenditures.
Havas “brought together 2,300 employees there late last year,” said Annette Stover, global chief of staff for Euro RSCG Worldwide, in an email to The Commercial Observer. “We are looking at doing the same around the world as opportunities arise.”
One such opportunity to put this new strategy into effect was in New York City, where Havas had three offices scattered throughout Manhattan.
But one part of the city that the firm had an especially longstanding and well-publicized relationship with was the Downtown market.
In 2002, Havas Media Planning Group U.S.A. agreed to consolidate its four existing offices in two Downtown offices, sized at 72,000 square feet, at 195 Broadway. In doing so, Havas became one of 14 businesses that participated in New York City’s Job Retention and Creation program (funded in part by the U.S. Housing and Urban Development’s Community Development Block Grant fund) meant to lure businesses back to Downtown following the aftermath of the Sept. 11 attacks.
In January 2007, the firm renewed its lease for 162,000 square feet at 350 Hudson Street, where it had been for roughly 20 years. That new lease, however, was set to expire in 2012.
In 2010, Havas hired David Falk of Newmark Knight Frank to help find it an office space around the 325,000-to-400,000-square-foot range. The move was at first exploratory, an attempt to see if there was a singular space out there that could house all of Havas’s interests.
“We looked at a list of virtually every property that had 150,000 square feet in the city, and we even looked at certain portions of New Jersey,” said Nancy Wynne, general counsel for Havas Worldwide.
In New Jersey, the company looked at Jersey City and Hoboken. As Havas explored its options, the firm did a zip code analysis and looked at various commuting times for its employees.
When Havas first looked at 200 Hudson sometime in 2011, the building did not have enough space to accommodate the entire group. As a result, Havas said it did not seriously consider the building as an option.
“We figured the minimum amount of space we would need if we only combined two of the four companies under consideration would be around 170,000 square feet,” said Ms. Wynne. If the firm combined three, that requirement would jump to 260,000 square feet.
“There are limited properties with that kind of space available,” Ms. Wynne added.
In addition to 350 Hudson Street, where Euro RSCG New York was headquartered, the company had satellite offices for sister company Arnold Worldwide at 110 Fifth Avenue and Havas Media at 195 Broadway.
But moving each firm would be difficult, especially as each one was occupying more than 70,000 square feet apiece.
Euro RSCG had about 158,000 square feet at 350 Hudson Street. At 195 Broadway, Havas Media had about 72,000 square feet. And at 110 Fifth, the firm had 95,000 square feet. In all, the firm had 1,200 employees in New York City that it wanted to bring together.
In the late summer of 2011, Trinity Real Estate, the owner of 350 Hudson Street and 200 Hudson Street, reached out to Havas and told the company it would be able to make enough space to provide for the media group’s needs.
At the time, there was a collection of printing agencies, each one carrying varying amounts of office space, that had departed for Queens. Getty Images, one of the tenants at 200 Hudson Street, had agreed to give up a floor, sized at 38,000 square feet, said Jason Pizer, president of Trinity Real Estate.
This brought Havas back to the building, and almost instantly the firm was intrigued by the possibilities 200 Hudson Street had to offer. Havas liked 200 Hudson’s large windows and its ceiling heights.
The space also had the suitable dimensions to help the company put its open-space plan into effect. Plus there was the evolving character of the Downtown neighborhood. With neighboring firms like Viacom and New York magazine holding offices inside Trinity Real Estate buildings, the company liked the creative and advertising-friendly aspect of the Hudson Square nabe.
“It’s been great to see how the neighborhood has thrived and attracted more and more creative companies in media, communications and technology,” said Ms. Stover.
The company could also transform the Hudson Street office into a predominantly open space planning. That was enough to sweeten the deal for Havas, which eventually agreed to take space at both 200 and 205 Hudson Street. In the end, the firm will have not only have its first New York City campus: It will eventually have the site of its global headquarters for the newly rebranded Havas Worldwide.
“Our teams are excited,” Ms. Stover. “[Hudson Square is] a fantastic location where all these vibrant neighborhoods come together.”
In the deal, Havas will be taking floors 2 through 8 at 200 Hudson Street, for a total of 225,000 square feet. Havas will also be taking 31,000 square feet on the ninth floor of 205 Hudson Street, and 4,000 square feet of storage space at 1 Hudson Street.
Asking rents were in the mid-to-upper $40s a square foot.
Mr. Falk, along with Newmark Knight Frank colleague Jason Greenstein, represented Havas in the deal. Marc Packman, also of Trinity Real Estate, worked with Mr. Pizer in representing the firm in-house in the deal. Cushman & Wakefield’s Andrew Peretz and Robert Constable also represented Trinity Real Estate in the lease transaction.
When all is said and done, Havas will add new amenities to the space, including a state-of-the-art production facility, a cafe, an “innovation laboratory” and a theater. TPG Architecture, which had worked on law firm Bingham McCutchen’s office space, has been hired to work on Havas’s new New York City campus.
Trinity, in turn, will offer Havas other incentives.
“They are going to have some outdoor deck space,” said Mr. Pizer.
“They are going to do some big time branding with the lobby and signage in the building,” he added. “That was very big for them coming over.”
Havas will begin its move to the new offices in 2013. The space at 195 Broadway will be a second-phase move and will not commence until 2014.
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