Yahoo! continues to make major old media-style headline splashes. On the heels of announcing its $1.1 billion acquisition of Tumblr, the tech giant announced that it will consolidate its Manhattan office space into 176,000 square feet across four floors at 229 West 43rd Street – the former New York Times headquarters building. The deal is the third in the building since the fourth quarter of 2012 to involve a technology industry tenant. CityGrid and 10gen previously announced moves to the 18-story tower, 767,000-square-foot tower, which has been making a major – and so far successful – push over the past 18 months to attract tech sector tenants with its renovated 28,000-square-foot floor plates, high ceilings, and new amenities.
There is certainly something poetic about the former home of the Grey Lady – and namesake of Times Square – becoming such a beacon for new media tenants. “We love the symbolism of our Yahoo! NYC team moving into the former New York Times building,” Yahoo!’s chief development officer Jackie Reses wrote about the transaction in a blog post. “There has been a revolution in how users around the world consume media. Yahoo! – like the New York Times began to do in the mid-19th century — is focused on making the world’s daily habits inspiring and entertaining across devices and around the world. Yahoo!’s growth in New York City is a reflection of how the city has become a global magnet for tech talent and entrepreneurism.”
Indeed, as The Real Deal noted in response to the Yahoo! deal, technology companies have collectively leased over 625,000 square feet of space in Times Square over the past 18 months, representing nearly 87 percent of all leasing activity in the submarket during that time (up from 18 percent during the previous 18-month period). Part of the attraction is the availability of large floor plates and blocks of space in Times Square (by comparison the vacancy rate in Midtown South is just 3.9 percent). Asking rents for Class A space in Times Square during the fourth quarter of 2012 were $61 per square foot, compared with $67 in Midtown East and $54.50 in Midtown South.
229 West 43rd Street was built in three stages between 1912 and 1937. It was originally designed by Buchman & Fox and features a 5-story, French Renaissance-style setback attic level with a Mansard roof. The New York Times Company sold the tower in 2004 to Tishman Speyer for $175 million. Africa Israel purchased it in 2007 for $525 million.
Yahoo! hopes to be in its new space by the end of the year and is in talks to be the tenant that brands the tower with rooftop signage (see image).