Facebook in Talks for Offices at Hudson Yards

Date : 06/26/2019 @ 10:57PM
Source : Dow Jones News
Stock : Facebook, Inc. (FB)
Quote : 198.36  -2.42 (-1.21%) @ 12:50AM

Facebook in Talks for Offices at Hudson Yards

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By Keiko Morris 

Social media giant Facebook Inc. is in talks to lease 1 million square feet of office space in a skyscraper under construction in Manhattan's newest neighborhood on the far West Side, according to a person familiar with the discussions.

The deal would create one of Facebook's largest office operations in the world outside of its headquarters in Menlo Park, Calif. If the lease is finalized, it would be a sign that New York continues to hold allure for big tech firms following Amazon.com Inc.'s about-face earlier this year.

Amazon canceled its plans for to build a $2.5 billion campus in the Long Island City neighborhood in Queens because of political opposition against state and city subsidies. It isn't clear whether New York is offering Facebook any subsidies in the deal under discussion.

The Facebook lease would mark yet another leasing milestone for Hudson Yards, the 18-million-square-foot project being developed over a rail yard in a venture of Related Cos. and Oxford Properties. Facebook is eyeing a 2.9-million-square-foot tower, 50 Hudson Yards, that already has cut a deal with money manager BlackRock Inc. for its global headquarters.

Other big names have made deals for Hudson Yards office space such as WarnerMedia, private equity firm KKR & Co. Related and Oxford officially opened the $25 billion development in March, debuting high-end shops and restaurants at its glitzy mall.

A possible Facebook lease at 50 Hudson Yards would enable the firm to consolidate operations from several of its current New York locations. Facebook has had sales and marketing employees in New York since 2008 and started hiring engineers in 2012.

Facebook's negotiations to consolidate in Hudson Yards were reported earlier by Crain's New York Business.

In 2013, Facebook signed a 10-year lease for 100,000 square feet at an office building near New York University. Today the firm has 680,000 square feet at that location, according to CoStar Inc.

Many New York officials and landlords worried Amazon's retreat would have a chilling effect on other potential relocations and expansions by tech companies in the city. But Facebook is just one of several major firms looking for space in New York City.

Alphabet Inc.'s Google is nearing a deal to buy or lease a planned 1.3 million-square-foot office building at St. John's Terminal in the city's West Village neighborhood, The Wall Street Journal previously reported. The tech firm has plans to add space in the city for more than 12,000 new workers.

"There are so many tech-related firms that are expanding at a ferocious pace," said David Falk, president of the New York Tri-State region at real-estate services firm Newmark Knight Frank. "This is the reason why the market has been really so hot."

Write to Keiko Morris at Keiko.Morris@wsj.com

 

(END) Dow Jones Newswires

June 26, 2019 17:42 ET (21:42 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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