Big Ten: The Top Leases of 2019
From Facebook in Hudson Yards to ad agency Dentsu on Ninth Avenue, these were the biggest leases of 2019
1. Facebook; 30, 50 and 55 Hudson Yards
The undisputed leasing champion of the year became Facebook, when it announced last month that it was taking more than 1.5 million square feet at Hudson Yards.
The media and tech behemoth will begin moving next year into the gleaming West Side mega-project, where it’s taking 1.2 million square feet at 50 Hudson Yards, about 265,000 square feet at 30 Hudson Yards, and roughly 57,000 square feet at 55 Hudson Yards.
“When considering the next phase of our growth in the city, it was important that our newest office space was situated in the heart of a vibrant community that offered access to arts, culture, media and commerce,” said John Tenanes, vice president of global facilities and real estate at Facebook, when announcing the deal. “Hudson Yards offered this and more.”
Fifty Hudson Yards, which is scheduled for delivery in 2022, will also house BlackRock’s global headquarters.
Facebook was represented by Cushman & Wakefield’s Rob Lowe and Jamie Katcher. Landlord Related Companies, which owns the property alongside Oxford Property Group, handled the negotiations in-house.
Update: This list has been corrected to include two additional leases from WarnerMedia and Google. They did not initially make the list because WarnerMedia was a leaseback and Google’s St. John’s Terminal deal was announced last year.
2. WarnerMedia; 30 Hudson Yards
Hudson Yards took second place as well, with WarnerMedia’s 1.4 million-square-foot lease at 30 Hudson Yards.
In April, Related Companies and Allianz Real Estate entered into contract to buy WarnerMedia’s office space and lease it back to the media giant for approximately $2.2 billion. WarnerMedia had purchased the office condominium at Related’s 100-story tower in 2014 as the site of its new headquarters.
In January the media conglomerate announced that it was putting the office condo up for sale, and Related was named the winning bidder shortly thereafter.
WarnerMedia has already begun moving its 5,000 employees in the New York City area into the shiny new office hub, and will consolidate its various arms at the new location for the first time, including HBO, CNN, Turner Broadcasting and Warner Bros.
Cushman & Wakefield’s Doug Harmon, Adam Spies and Kevin Donner represented WarnerMedia in the deal.
4. Publicis Groupe; 375 Hudson Street
The year’s fourth-largest deal, just shy of a million square feet, came in the up-and-coming office market of Hudson Square.
French advertising and public relations firm Publicis Groupe announced in July that it was expanding its presence at 375 Hudson Street, signing a 960,000-square-foot lease. The deal carried a 20-year term and included a renewal of 680,000 square feet of existing space.
The company has a history at the property, owned by a Hines, Trinity and Norges joint venture, dating back to its construction in the late 1980s, when advertising behemoth Saatchi & Saatchi — which Publicis acquired in 2000 — was an original tenant.
“We’re excited that Publicis, an innovative, growing company that was among the first creative tenants in Hudson Square, has extended its commitment to this vibrant and growing area of the city, which has become a hub for leading-edge media, advertising, and technology companies,” said the Reverend Dr. William Lupfer, rector of Trinity Church, when announcing the deal.
Indeed, Hudson Square is poised to welcome newcomers Disney and Google to the neighborhood. Maybe they’ll need a hand with their advertising? Your move, Publicis.
CBRE’s Howard Fiddle, Paul Amrich and Ben Joseph represented the landlord. CBRE’s John Maher, Paul Myers, Mike Wellen, Greg Maurer-Hollaender and Cara Chayet represented the tenant.
Update: This story has been updated since publication to include the brokers involved in the deal.
5. NYC Health & Hospitals; 50 Water Street
Tenants kept migrating to Lower Manhattan from other parts of the city this year, with the Financial District nabbing the fifth-biggest deal of 2019.
NYC Health + Hospitals signed a 25-year lease in January for over half a million square feet at GFP Real Estate and Northwind Group’s 50 Water Street in the Financial District. The nonprofit corporation that operates the city’s public health care facilities took 526,552 square feet and will occupy more than half of the 27-story office building. It will be the first major tenant under the new ownership of GFP and Northwind, which acquired the property in October.
Health + Hospitals will relocate 2,600 staff members from six offices throughout the city at the new location. The organization will also continue to occupy 220,000 square feet across the street at 55 Water Street, creating a single Downtown campus. The transition started this year and will continue over the next five years when existing leases expire, a spokesman for Health + Hospitals previously told Commercial Observer.
Newmark Knight Frank’s Brian Waterman and Ira Rovitz represented Health + Hospital and it wasn’t clear who handled the deal for landlords.
6. Cravath, Swaine & Moore; Two Manhattan West
Brookfield Property Partners was able to get an anchor tenant to sign on to its second tower in its six-building Manhattan West development near Hudson Yards in October.
White-shoe law firm Cravath Swaine & Moore inked a deal for 481,000 square feet on the 25th through 37th floors of the 58-story Two Manhattan West at the corner of Ninth Avenue and West 31st Street. It will move its headquarters from 825 Eighth Avenue to Manhattan West in 2024.
The more than 7-million-square-foot Manhattan West project has several office buildings along with an 844-unit rental property The Eugene and boutique hotel The Pendry. The first part of the project, the 2.1-million-square-foot office tower One Manhattan West, opened in October.
CBRE’s Lewis Miller, Andrew Sussman, Cara Chayet and Munish Viralam represented Cravath while Brookfield’s Duncan McCuaig and P.J. Massey handled it in-house with Bruce Mosler and Josh Kuriloff of Cushman & Wakefield.
7. McCann Worldgroup; 622 Third Avenue
Midtown East locked down a large tenant for another 15 years in the seventh-largest deal of 2019.
Interpublic Group, the parent company of ad giant McCann Worldgroup, renewed its lease in June for McCann’s 450,000-square-foot offices at Cohen Brothers Realty’s 622 Third Avenue between East 40th and East 41st Streets.
McCann first moved into the 39-story tower in 2000 and occupied the entire second to fifth floors along with the 16th to 28th floors of the property.
Cohen Brothers’ Marc Horowitz — who handled the deal in-house for the landlord — told CO at the time that McCann “went through an extensive citywide search” for new space but eventually decided to stay put at 622 Third Avenue.
“We’re excited that such a globally influential firm elected to remain and stay in this building,” Horowitz said at the time. “This 15-year lease represents a 35-plus-year commitment to the building.”
Scott Panzer, Shannon Rzeznikiewicz and Robert Romano of JLL represented McCann in the deal.
8. EmblemHealth; 55 Water Street
Water Street nabbed its second spot on this year’s list with EmblemHealth’s renewal at 55 Water Street in May.
The insurance provider signed a 15-year early renewal for its 440,000-square-foot offices spread out over 13 floors in the 53-story building between Broad Street and Old Slip. EmblemHealth has occupied the space since 2003.
“As a leader in the health and wellness space, we recognized the company’s need for a space that could offer employees flexibility, privacy and diversity in terms of layout,” Colliers International’s Brian Given, who represented the tenant along with Sheena Gohil, Steve Jaray and Tom Shirocky, said in a statement at the time. “This building fits all of EmblemHealth’s criteria and continues to offer upgrades that accommodate tenants’ shifting needs, making the decision to renew an easy one for both parties.”
Howard Fiddle, Dave Caperna, Brad Gerla, Evan Haskell and Mary Ann Tighe of CBRE handled the deal for the landlord, New Water Street Corp.
9. WeWork; 437 Madison Avenue
WeWork didn’t have the best 2019, but amidst all of its turmoil, the coworking startup still signed the ninth biggest deal of the year in September.
The company signed a deal for 362,197 square feet at William Kaufman Organization’s 437 Madison Avenue between East 49th and East 50th Streets. WeWork will replace Omnicom — whose lease expires in 2020 — and occupy the second through 12th floors along with a portion of the 14th floor.
WeWork plans to take over the space in 2021.
JLL’s Peter Riguardi and Howard Hersch represented WeWork. Michael Lenchner of Sage Realty Corporation, the leasing arm of WKO, handled it for the landlord in-house along with Frank Doyle, David Kleiner, Cynthia Wasserberger, Hayley Shoener and Harlan Webster of JLL.
10. NYC Human Resources Administration; 250 Livingston Street (Brooklyn)
Brooklyn broke the top ten with a city agency planning to stay put at its Downtown Brooklyn home.
The New York City Human Resources Administration (HRA) renewed its lease for 10 years in May for 342,496 square feet across the first eight floors and two basement levels of Clipper Equities’ 250 Livingston Street.
As part of HRA’s lease, the New York City Department of Environmental Protection will occupy the entire eighth floor and the city will pay $14.9 million, or $43 per square foot, for the first two years.
HRA — which has occupied the majority of the 350,000-square-foot property between Hoyt and Bond Streets since 2000 — will also pay $250,000 a year for 50 parking spots in the building’s garage, with the fee rising 3 percent every two years.
No brokers were involved in the deal.
Amazon; 410 Tenth Avenue (Honorable mention #1)
Amazon started the year publicly dumping New York City but ended it by taking us back.
The e-commerce giant signed a deal this month for 335,00 square feet at SL Green Realty Corp.’s soon-to-be-redeveloped 410 Tenth Avenue in the Hudson Yards neighborhood.
Amazon planned to build part of its second headquarters in Long Island City, Queens, but canceled the plans in February after fierce opposition from lawmakers and residents over the billions of dollars in government subsidies it was promised.
It won’t get any tax incentives for its new offices — which it plans to occupy in the third quarter of 2021 — but Amazon’s also planning a much smaller footprint. The Long Island City plans called for a 4-million-square-foot headquarters that would eventually employ up to 25,000 people. Only 1,500 employees will move to 410 Tenth Avenue.
JLL’s Derek Trulson, Bill Peters and Josh Stuart represented Amazon while Newmark Knight Frank’s Brian Waterman, Scott Klau, Brent Ozarowski and Erik Harris handled it for SL Green.
Dentsu; 341 Ninth Avenue (Honorable mention #2)
Tishman Speyer nabbed an anchor tenant for its redevelopment of a West Chelsea post office.
Advertising company Dentsu Aegis Network — a subsidiary of Tokyo-based media conglomerate Dentsu — inked a 15-year lease in November for 320,000 square feet of the Morgan North development at 341 Ninth Avenue. The firm will occupy half of the sixth floor along with the entire seventh through 10th floors of the 10-story, Art Deco postal facility.
Tishman struck a 99-year lease with the U.S. Postal Service for the upper floors of the building in October with plans to redevelop the fifth through 10th floors while adding 51,000 square feet of retail on the ground floor. The lower floors will still be used as a post office and mail processing facility.
“Barely a month ago, we finalized our commitment to redevelop Morgan North because we saw it as an ideal fit for companies like Dentsu Aegis, which are powered by creative people and their innovative ideas,” Rob Speyer, the president and CEO of Tishman Speyer, said in a statement at the time. “With its dynamic West Chelsea location, authentic character and unparalleled access to collaborative indoor and outdoor spaces, we knew that 341 Ninth would be a major draw for such forward-looking firms.”
Tishman handled the deal in-house while Richard Bernstein, Adam Ardise and Jared Thal of Cushman & Wakefield represented the tenant.
And the biggest retail lease goes to…
Ikea, which opened its first outpost in Queens.
In September, the Swedish furniture retailer signed a 10-year lease for 115,000 square feet in Vornado Realty Trust’s Rego Center mall at 61-35 Junction Boulevard. It plans to open the store next summer.
The Queens outpost will have “thousands of Ikea products for purchase and takeaway” but larger furniture items will be available for delivery only, the company said at the time. It’s part of Ikea’s push — which started in 2017 — to open smaller-format stores in city centers between 70,000 to 150,00 square feet, roughly one-third the size of its typical 400,000-square-foot warehouses.
Urban Edge Properties’ Robert Minutoli represented the landlord in the deal while brokers from CBRE handled it for Ikea.
As for industrial...
Industrial has become a hot market in recent years as e-commerce gains prevalence and companies need warehouses for last-mile distribution centers. So it makes sense that the largest industrial lease of the year was Amazon setting up its first distribution center in the Bronx.
Amazon signed a deal for 120,775 square feet in January at 1300 Viele Avenue and 1301 Ryawa Avenue in the Hunts Point section of the borough.
Gary Capetta and Matt Corpuel of Pantheon Properties represented owners MRP Realty and AEW Capital Management along with CBRE’s John Reinertson. It’s unclear who handled it for Amazon.