Facebook Closing on 740K SF at Farley Post Office, Despite Work From Home Initiative
Facebook’s breathlessly-watched negotiation to lease more than 700,000 square feet at Vornado’s Farley Post Office site is all but a done deal, sources told Commercial Observer.
“It’s immensely complicated. They were hoping to finish it by Memorial Day. They’ll miss that date, but the fact that they were aiming for it shows how near they are,” an insider said.
It was widely speculated that Facebook might change its mind about taking space at Farley after the coronavirus struck. But sources said the talks never broke down and the goal line’s now in reach.
No deal, including this one, is done before it’s done. The COVID-19 situation makes everything subject to last-minute collapse.
On Thursday, Facebook CEO Mark Zuckerberg announced he would shift as many as half of the firm’s 45,000 employees to work-from-home status, the Wall Street Journal reported.
But the transition would unspool slowly over the next ten years, he said. It didn’t appear to immediately impact Facebook’s ongoing expansion in Manhattan.
A likely 740,000-square-foot commitment between Facebook and one of the country’s largest developers at a high-profile Manhattan location would be a promising bellwether for the office market’s future.
It would also be a stirring morale-booster in a commercial real estate market – and pandemic-battered city – starved for good news.
Zuckerberg’s social media behemoth began talks with Vornado chairman Steve Roth late last summer. Roth was so eager to bring Facebook to the site that he gave the company the green light to negotiate over Apple, which was also interested in the location.
Vornado’s project is part of an adaptive reuse of the landmarked former post office building between Eighth and Ninth avenues and West 31st to 33rd Streets. The new Farley will have 740,000 square feet of offices and 120,000 square feet of “curated” retail.
The building will also house a spectacular new Moynihan Train Hall, part of a state-backed project to modernize cramped and inefficient Penn Station across the street.
Vornado’s development cost is estimated at $1.03 billion, according to the publicly traded company’s most recent SEC filing. Related Companies is a five-percent partner in the project.
Facebook would have space on floors 2-4 as well as on a new fifth level being built atop the original structure.
Prior to the coronavirus outbreak, Facebook also signed leases for 1.5 million square feet at three of Related’s Hudson Yards towers. It currently has 760,000 square feet at 770 Broadway and 266,000 square feet at 225 Park Avenue South.
“We constantly review our real estate options and don’t have any updates to report at this time,” Facebook representatives said in an email to CO. Vornado wouldn’t comment.