Facebook Absorbs J. Crew’s Offices at 770 Broadway
Facebook is expanding its footprint at 770 Broadway in Greenwich Village by taking J. Crew’s office space.
J. Crew had been looking to abandon its pricey office space in the Vornado Realty Trust (VNO)-owned office property for a while, but it still had four years remaining on its lease. Meanwhile, Vornado had been negotiating to buy out other tenants so that Facebook could grow, as The Real Deal reported in January.
So Vornado ultimately paid J. Crew $35 million, or $100 a square foot, for the four remaining years on its lease, according to TRD. Then Facebook was free to sign a “long-term direct deal” with Vornado for an additional 370,000 square feet, the publication reported. The terms of the deal were not disclosed. Gus Field, who recently departed Cushman & Wakefield (CWK) for Tishman Speyer, handled the transaction for the social network. A Vornado spokesman declined to comment on the lease.
A Facebook spokesman said in a statement that the company “will continue to invest in New York City for its strong talent pipeline, location and technology ecosystem.”
And soon J. Crew will decamp Midtown South for cheaper offices at Brookfield Place. It subleased 300,000 square feet from Bank of New York Mellon for 16 years at 225 Liberty Street, as Commercial Observer reported earlier this year. The clothing retailer will pay rent in the mid-$50s per square foot.
JLL (JLL)’s Peter Riguardi and Robert Martin represented J. Crew in its buyout negotiations with Vornado. Both brokers were also involved in the sublease deal at Brookfield Place, but on opposite sides. Martin and JLL’s Joe Messina and TJ Hochanadel represented J Crew, and Bank of New York Mellon was represented by a different JLL team consisting of Riguardi, Michael Berg, Frank Doyle and Clark Finney.
“This is a great result for J. Crew on many fronts,” Martin told CO. “It’s a cost effective deal. They’re able to lock into a below-market rent in one of the best buildings in Lower Manhattan for a very long time. And they’re able to utilize a substantial portion of the Bank of New York’s space so that they avoid the out-of-pocket capital to build out new space.”
Riguardi noted that the space hadn’t been on the market yet, but JLL had a relationship with Bank of New York. “The space ended up having a lot of residual value which helped make the deal,” he added.