Time Warner is moving forward with its plan to possibly move out of the Time Warner Center and consolidate its operations at new headquarters elsewhere to save costs, the Wall Street Journal reported. In a memo to all New York-based employees yesterday, the company said it would be undertaking a broad reevaluation of its real estate, with a formal plan expected next year.
Time Warner moved to Columbus Circle in 2004, where it had partnered with Related Companies to build the David Childs-designed building that is its company headquarters now.
But many of its leases, including ones for more than 2 million square feet of space in Midtown, will expire as soon as 2017 and 2018, and renewing them could be costly. Since not many buildings could hold all of Time Warner’s 6,000 employees in the city, possible alternative options would be Hudson Yards, Related Companies’ $15 billion development or Brookfield Office Properties’ development site on Ninth Avenue and 33rd Street. Time Warner is also looking at the World Financial Center and the World Trade Center.
Even if Time Warner decides to stay at Columbus Circle, it may consolidate its other operations somewhere, a move that could save Time Warner more than $100 million in the future.
While rents in top Midtown buildings have risen by 78 percent over the past 15 years, according to brokerage Cassidy Turley, Lower Manhattan has higher vacancy rates and lower rents.
Since Time Warner is one of the city’s largest tenants, putting it among the top 20 companies that rent space in Manhattan, any move could pose a significant shift in the local real estate landscape, the Wall Street Journal notes, with the space it occupies in the New York region making up about 20 percent of its global real estate portfolio. [WSJ]