The Real Deal New York

Macmillan Publishers weighs leaving Flatiron Building for a new HQ

Company occupies the majority of the landmark 180K sf property
By Rich Bockmann | May 25, 2016 03:20PM

Flatiron Building (credit: The Rise)

Flatiron Building (credit: The Rise)

Macmillan Publishers, the sole office tenant in the Flatiron Building, is considering relocating its headquarters when its lease expires in a few years.

Should that happen, it would give the property’s owners a blank slate to work with for the first time since the building was completed more than 100 years ago.

Macmillan, parent company to publishers like St. Martin’s Press and Henry Holt & Co., has been in the iconic tower in some shape or form for about half a century. Now, it occupies all of the office space — nearly 176,000 square feet — in the roughly 180,000-square-foot building at 175 Fifth Avenue.

The publisher’s longtime broker, Leon Manoff of Colliers International, said the company is considering all options for when its lease expires in a few years, including staying put or relocating elsewhere in Manhattan to a new, 150,000-square-foot headquarters.

Manoff TRData LogoTINY said the publisher is considering “every submarket” in Manhattan, and would be looking for space that checked the boxes of economics, branding and “responsive[ness] to employee demographics,” among others.

The Flatiron’s majority owner, Sorgente Group of America, did not return calls for comment but several years ago the company was reportedly considering converting the landmarked 22-story building into a hotel.

While Manoff wouldn’t comment on Macmillan’s rent, the company is paying below market rate. Asking rents in the eponymously named Flatiron District averaged $68 per square foot during the first quarter of the year, according to CBRE.

In recent years several book publishers have followed the migration of tech and media tenants relocating to Lower Manhattan, including Cambridge University Press, HarperCollins Publishers and Macmillan Science and Education.

In 2014, Manoff negotiated a deal for Macmillan’s education arm to consolidate several offices to 176,000 square feet at Brookfield Property Partners’ One New York Plaza.

Author Alice Sparberg Alexiou, who wrote the book “The Flatiron” on the history of the Flatiron Building published by St. Martin’s Press, said that contrary to popular belief that the former Fuller Building was vacant for many years after its namesake tenant left in 1929, the building has never actually been empty.

“The Flatiron Building was never completely vacant,” she wrote in an email. “Unfortunately rent rolls do not survive, but if you do a search of newspaper databases post-1929, businesses with offices in the Flatiron will certainly come up.”