Despite location, ex-Times building has edge in competition for tech tenants

June 15, 2012 03:30PM

Blackstone Group is on the prowl for a tenant for the top 12 floors of the New York Times building, and Bloomberg News provided a glimpse of how the private equity giant is planning to generate revenue from its $160 million purchase. Blackstone spent $105 million renovating the nearly 480,000 square-foot block of space and famously added ping-pong tables, a basketball court and renovated 25,000 square feet of outdoor space in an effort to attract new media-type tenants to the Times Square location.

For the $67 per square-foot average asking rent, that creative tenant is also promised the ability to puts its name on the rooftop cupola that once featured the Grey Lady’s logo.

But by signing on the dotted line, the tenant would be isolating itself from the thriving new media and tech scenes in Midtown South and Hudson Square. “If they could move the building 40 blocks south, they would have leased it 40 times over,” said Richard Bernstein, vice chairman at Cassidy Turley.

Bloomberg noted that there’s no Midtown South space with 480,000 square feet of contiguous space (although 414,000 square feet of space can be had at 101 Sixth Avenue), so Blackstone has that distinct advantage with well-established creative firms, some of which — including Yahoo and LinkedIn — have already shown a willingness to move to Midtown. Brokers from Newmark Grubb Knight Frank have reportedly shown the space to Facebook, Amazon, and advertising firms Deutsch and WPP.

“Ultimately, these types of tenants grow up and need a building with a great location and tremendous infrastructure, both of which this has,”  said Jeffrey Peck, a senior managing director at Studley. [Bloomberg News]