From left, Mitchell Steir, CEO of Studley, Jeffrey Bewkes, CEO of Time Warner and the Time Warner Center
Entertainment giant Time Warner picked commercial advisory firm Studley to conduct a study of the media company’s estimated 5 million square feet of office space in New York and New Jersey in anticipation of the bulk of its leases expiring in 2017, sources familiar with the deal said.
While this is just a review of the company’s portfolio and needs, a move by one of the largest tenants in Manhattan with its office space could have a significant impact on new developments in the city. In addition, insiders said this assignment puts Studley in a strong position to win the more lucrative assignment to broker the leasing deals.
The winner and losers were notified last week of the decision, real estate sources said. The request for proposals was issued over the summer and proposals were submitted in the first week of September. Firms including Jones Lang LaSalle, CB Richard Ellis and UGL Equis vied for the work, several sources said.
Time Warner asked the firms to analyze its current office usage and make recommendations about how it can consolidate its space and take advantage of the depressed real estate market, one source said. A Time Warner spokesperson declined to comment. Studley also declined to comment.
Brokers say Time Warner could stay put in many of its approximately 20 locations or take a more aggressive step and consolidate some of its divisions in one location.
Some said it was unlikely Time Warner’s famously independent brands such as Home Box Office would all unite under one roof or in one complex. But the company has made bold moves in the past, including investing in 1 million square feet of space at the Time Warner Center at 60 Columbus Circle, which it owns and where its headquarters occupies about 870,000 square feet of office space.
Studley arranged that deal with developer Related Companies in the early part of the last decade. Related is now developing the West Side rail yards, where it plans to build 12 million square feet of office and residential space. Other large developments underway or on the drawing board that could host such a large tenant include the new World Trade Center towers or Vornado Realty Trust’s 15 Penn Plaza.
In addition to its headquarters, Time Warner leases millions of square feet in Manhattan. Its largest lease – for 2.2 million square feet â€” is at the Time & Life Building at 1271 Sixth Avenue in Rockefeller Center and is expiring in 2017, the company’s annual report filed with the U.S. Securities and Exchange Commission for 2009 shows.
Other Time Warner leases include the offices of HBO with 673,000 square feet at 1100 and 1114 Sixth Avenue, two leases that expire in 2018; business and editorial offices of Time magazine at 135 West 50th Street, where 240,000 square feet expires in 2017; and 81,100 square feet occupied by HBO at 120 East 23rd Street through two leases which expire in 2018, the filing shows. ?
The company also leases to subtenants about 800,000 square feet of space it does not currently occupy, including 582,400 square feet at 75 Rockefeller Plaza, which expires in 2014, and about 186,000 square feet at 1271 Sixth Avenue, the federal filing shows.