The Real Deal New York

WTC shuffle: Spotify finalizes deal for 378K sf at 4 WTC

Music-streaming company will receive up to $11M in tax credits
By Kathryn Brenzel | February 15, 2017 03:50PM

From left: Larry Silverstein, 4 World Trade Center and Spotify’s Daniel Ek

Spotify, which Gov. Andrew Cuomo called a “hot, cool company,” finalized a deal for 378,000 square feet of office space at 4 World Trade Center, state officials announced on Wednesday.

The Swedish-based music-streaming company was reportedly debating between One World Trade Center or 4 World Trade Center late last year. Cuomo announced on Wednesday that the company had settled on 4 World Trade Center, Silverstein Properties’ TRData LogoTINY 2.5 million-square foot office tower.

The company will receive up to $11 million in rent credits over the next 15 years through the state’s World Trade Center Rent Reduction Program.

“Today is a great day for the World Trade Center and Downtown,” Larry Silverstein said in a statement. “This major commitment by a pioneer of the digital economy is further proof that Lower Manhattan has become the top destination for New York’s most innovative companies.”

Silverstein was represented in-house by Jeremy Moss and by CBRE’s David Caperna, Steve Eynon, Adam Foster, Evan Haskell, Rob Hill, Ken Meyerson, Stephen Siegel and Mary Ann Tighe. JLL’s Peter Riguardi, Ken Siegel, Alexander Chudnoff  and Jim Wenk represented Spotify.

Haskell told The Real Deal the asking rent for Spotify’s new digs on the 62nd through 72nd floors was in the mid $80s. The building is now fully leased. He noted that 4 WTC was competing with 1 WTC and a few other locations.

“While we do compete, we’re also always happy with their success because ultimately it’s our success,” Haskell said of 1 WTC.

Spotify plans to add another 1,000 employees to its new office, while retaining its 832 jobs. It currently occupies 140,000 square feet at RXR Realty’s 620 Sixth Avenue.

Horacio Gutierrez, Spotify’s general counsel, said that the company was drawn to the “diversity” of Lower Manhattan.

“Lower Manhattan has always been the pulse of New York,” Gutierrez said.

Spotify was expected to go public this year, but the company is reportedly considering delaying its initial public offering until 2018.

During Wednesday’s news conference, Empire State Development Corporation president Howard Zemsky also shared and mocked the governor’s Spotify playlist, noting that it was New York-centric and included “Cheek to Cheek,” which he oddly noted could be interpreted in “various ways.” The list features four Billy Joel songs, but it appears that Frank Sinatra didn’t make the cut.

(To see the largest Manhattan office tenants, click here)