Yext Inc. is taking nearly 40,000 square feet at One Madison Avenue, the building’s landlord SL Green announced.
The firm, which has built a thriving business providing databases and software to optimize Internet search results for companies, will take 36,823 square feet for seven years on a portion of the 1.2 million-square-foot building’s fifth floor.
One Madison Avenue is one of only a handful of institutional caliber office buildings in Midtown South, a neighborhood that has risen in popularity among tenants, particularly those in the tech sector. Steve Durels, a senior executive at SL Green who oversees leasing the company’s multimillion square foot office portfolio in the city, said the space, which came available when two tenants recently vacated, was quickly snapped up by Yext.
“We had it listed for 60 days before we did the deal with Yext, which was a very short period,” Mr. Durels said. “It’s further affirmation of everything you hear about this part of town, that tech companies are coming here and that the market is very active.”
SL Green marketed the space in the $60s per square foot. Because Yext received a landlord contribution towards the cost of modestly refurbishing the space for its occupancy, the rent worked out to a deal likely in the $50s per square foot.
While Midtown South submarkets like Chelsea, the Meatpacking District and the Lady’s Mile have attracted many of the neighborhood’s most notable transactions in recent months, the deal with Yext shows that eastern precincts like lower Madison Avenue and Park Avenue South have also become popular.
The cosmetics firm L’Oreal for instance is rumored to be considering a large deal to move its headquarters to 225 Park Avenue South.
Mr. Durels said that One Madison Avenue, whose anchor tenant is the financial firm Credit Suisse, is fully leased but that the recent lease with Yext demonstrated how tech companies and other users are not just in search of the loft-like office environs that Midtown South is known for.
“One Madison has tremendous infrastructure befitting a major financial company, such as backup power and huge amounts of cooling,” Mr. Durels said, mentioning amenities that were attractive to Yext.
SL Green has turned its focus to the surging neighborhood. The company recently acquired 304 Park Avenue for $135 million, a nearby building about 215,000 square feet in size. Mr. Durels said his team is focused on filling about 12,000 square feet of vacancy at the property.
“We’ve always been flexible where we invest, we migrate and come back to where the tenant demand is and right now there is strong demand for the Midtown South market,” Mr. Durels said.