The Real Deal New York

Blue Apron puts search for new HQ on the back burner

$2B startup signs 43K sf sublease in Flatiron, lets search for a larger home simmer
By Rich Bockmann | August 04, 2016 12:16PM

From left: Blue Apron cofounders llia Papas, CEO Matt Salzburg, Matt Wadiak and 40 West 23rd Street

From left: Blue Apron co-founders llia Papas, Matt Salzburg and Matt Wadiak and 40 West 23rd Street in Midtown South

Make-it-yourself meal-delivery service Blue Apron is letting its search for a new headquarters simmer.

The $2 billion startup signed a short-term sublease in Midtown South for about 43,000 square feet, putting its hunt for a permanent new home on hold.

Blue Apron, which delivers recipes and fresh ingredients to membership-based customers at home, inked a deal to take the full fifth floor at 40 West 23rd Street in the Flatiron District for a term believed to be around 18 months to two years, sources told The Real Deal.

Advertising technology firm AppNexus, the sublessor, has a long-term lease on 220,000 square feet in the six-story building, best known as home to Home Depot, and the adjoining 12-story building next door at 28 West 23rd Street.

AppNexus occupies several floors in the building and has been subletting space to fellow tech companies looking for short-term fixes. Blue Apron’s space had previously been let to BuzzFeed in late 2014 as the news website negotiated on more than 400,000 square feet on the other side of Madison Square Park at 225 Park Avenue South in late 2014.

The clickbait platform Taboola is leaving behind 24,500 square feet it subleases from AppNexus when it relocates to its new home at 1115 Broadway, according to CoStar.

Asking rent for the space is in the $60s per square foot, sources said. CBRE’s Sacha Zarba, who is leading the company’s search for a new headquarters and negotiated the short-term deal, could not be reached for comment.

The fast-growing Blue Apron currently occupies about 10,000 square feet at 5 Crosby Street in Soho, and had been searching areas of Downtown Brooklyn and Midtown South for as much as 100,000 square feet. It was not clear why the company and its team shelved the search.