Unable to find space in pricey Midtown South, the major Hollywood talent agency, CAA, is relocating to the Chrysler Building, several sources familiar with the company’s office search say.
CAA, one of the most powerful and successful talent reps in the entertainment business, which counts a deep roster of star clients like Jennifer Aniston, George Clooney and Daniel Craig, currently has its offices at 162 Fifth Avenue, a building owned by ABS Partners in the Flatiron District.
Floors at the 11-story, 130,000-square-foot property are about 11,000 square feet apiece and CAA, as it has grown over the years, has expanded onto six floors there, a layout that has become inefficient. The agency was launched by former William Morris talent agents Mike Rosenfeld, Michael Ovitz, Ron Meyer, William Haber and Rowland Perkins following a dinner in 1975.
“They’ve got six reception areas, six bathrooms, six cores and elevator shafts running through their space,” a source familiar with CAA’s space said.
As of press time, it wasn’t clear how much space CAA was taking at the Chrysler Building, but sources say the company has wanted to expand to between 75,000-100,000 square feet and perhaps lay some expansion rights beyond that. Floors are much larger in the base of the Chrysler Building than in 162 Fifth Avenue, between 25,000 and 40,000 square feet apiece, meaning that CAA will be able to consolidate its opertions onto far fewer floors by moving to the new location.
While in other office markets in the city, the departure of a tenant like CAA might be reason for concern amid the slow pace of leasing, for ABS Partners the vacancy could be an opportunity. Midtown South rents and occupancy levels have shot up in recent months as the neighborhood has become increasingly popular among office tenants, especially tech and creative companies.
CAA will also leave behind a high end office installation in the space at 162 Fifth Avenue, infrastructure that will attractive to and can be reused by interested tenants. ABS Partners will aim for smaller, single floor space users to replace CAA, an active segment in a market populated by boutique and startup firms.
CAA had previously sought to remain in Midtown South, getting close to a lease over a year ago at 200 Fifth Avenue, one of the neighborhood’s most expensive and exclusive office buildings. The firm backed away when it was unable to secure expansion rights that would have allowed it to grow at that location.
The deal to go to the Chryler Building, a New York City landmark known for its iconic art deco spire, highlights a recent trend in which tenants, bumped from the tight Midtown South market, are actually moving to Midtown to capture lower priced rents and better office availability, a situation that is a reverse of market dynamics of the past in which Midtown traditionally has been known as the city’s priciest and most desireable office neighborhood.
Neal Golden, a leasing executive at Newmark Grubb Knight Frank, represents CAA. Mr. Golden could not be reached for comment. Calls to in-house leasing representatives at Tishman Speyer, the owner of the Chrysler Building, were also not returned. The Commercial Observer suffered the same fate as countless actors, directors and screenwriters: CAA did not return our calls.