Exclusive: Foursquare Nears Deal on Broadway
Jotham Sederstrom Oct. 25, 2011, 9:11 a.m.
Location-based social network Foursquare will say goodbye to its longtime office mates at 36 Cooper Square. The startup, which raised a $50 million round of funding this summer, has vastly outgrown the 7,600 square feet at the East Village digs it shares with Curbed and web design shop Hard Candy Shell, and is negotiating a sublease for the top two floors at 568 Broadway.
Nothing has been signed, but the deal has been in the works for more than two weeks and appears set to close soon. “We’re in the process of drafting the lease with Foursquare,” said Richard Pierpoint, real estate manager for Scholastic, which leases space at the building.
It’s not easy to find office space to accommodate the needs of a fast-growing startup. Most young Silicon Alley companies are in fierce competition for talent, so location matters–startups want the usual proximity to transportation and reasonable prices, but also require a hip neighborhood and room to rapidly expand. “There’s very little in that size range, and creative loft-like space is hard to come by in general, said one broker who works on similar deals.
Among startups, it would seem that 568 Broadway, a sunny elevator building at the confluence of eight subway lines, is in high demand. Foursquare was up against another buzzy, fast-growing startup: Tumblr, which raised $85 million in September and was also interested in the space, said multiple sources with knowledge of the negotiations. Scholastic decided to go with Foursquare. “They’re not pursuing 568 Broadway now or in the future,” said a source familiar with the deal, of Tumblr. “Obviously, they’re in the market for a lot of space.”
Another local rockstar, ZocDoc, which recently raised $75 million from Goldman Sachs and Facebook investor Digital Sky Technologies, occupies the teal-painted ninth floor of the building.
The space was originally offered for a sublease through April 2013. However, the deal is being directly negotiated between Foursquare and Scholastic, bypassing the building’s leasing office. Because at least three offers came in for the space at the same time, and Scholastic had been scouting for a broker but hadn’t found one yet, the company decided to negotiate directly.
Foursquare, founded in 2009, has more than 70 employees in New York and is currently hiring for another 18. The company also recently opened a San Francisco office. The two floors at 568 Broadway will give the company a combined 56,000 square feet.
Foursquare, which declined to comment, is represented by Sean Black of Jones Lang LaSalle. Brokers Matt Bergey and Matt Saker of CB Richard Ellis were representing Tumblr.