The Real Deal New York

Penthouse magazine, following cuts, needs less office space

Its parent company, which operates dating, sex sites, lost $31M last year

June 29, 2012 12:30PM
By Adam Pincus

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About half of the office space Penthouse magazine occupies in its Lower Manhattan location was listed for sublease this month.

FriendFinder Networks, which owns the Penthouse brand as well as a wide range of racy Internet sites and more mundane dating sites, is offering to sublease between 6,000 square feet and 8,000 square feet of space the magazine occupies on the 14th floor of 20 Broad Street, company spokesperson Lindsay Trivento said.

Penthouse has slashed staff over the past year from about 70 to about 30.

“We have excess space,” Trivento told The Real Deal. “And the idea is to lease it out.”

The sublease will not impact operations at the magazine, she said.

Penthouse has occupied 16,400 square feet at Vornado Realty Trust’s 468,000-square-foot building between Exchange Place and Wall Street, since signing a 10-year lease there in 2008. The firm is paying about $39 per foot, but that rises to $43 per foot in 2013, a copy of the lease filed with the U.S. Securities and Exchange Commissions shows.

The listing broker for the space, Kenneth Salzman, a senior managing director for Lee & Associates, said a large number of firms had expressed interest in the location.

“We have had tremendous activity with technology-driven companies and those that want to be located near the NYSE Euronext headquarters,” he said.

FriendFinder is a public company headquartered in Boca Raton, Fla. It operates a broad spectrum of more than 50 dating and social media sites, from PerfectMatch.com, which bills itself as “a leading online relationship service helping adults seeking successful, lasting connections,” to HotMatch.com, which boasts of being “the wildest online community for hot and sexy hookups.” Most of the Internet sites are maintained out of offices in Sunnyvale, Calif., Trivento said.

The Internet sites, which had a total of 872,000 paid subscribers as of the end of 2011, provided about 93 percent of the company’s revenue, the firm’s annual report shows. The entertainment division which includes Penthouse, provided about 7 percent of the company’s revenue. In addition, FriendFinder, which is publicly traded on Nasdaq, has consistently lost money in recent years; last year, losses totaled $31 million.

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