Gannett, the publisher of USA Today and 109 daily newspapers across 34 states, plans to Move Its New York City Offices From The Plaza District to less expensive space in Times Square.
The McLean, Virginia-based company will relocate its media-sales office from the Park Tower Group’s 535 Madison to Paramount Group’s 1633 Broadway, where it has a lease out for 50,000 square feet, sources told The Real Deal.
Gannett has spent more than 25 years at Park Tower Group’s 37-story office building, which is one of the pricier properties on Madison Avenue. It occupies 60,000 square feet on a lease expiring this year.
Paramount, meanwhile, renovated the lobby at the 2.6 million-square-foot tower known as Paramount Plaza coinciding with a large block of availability the owners got back when the accounting and tax-consulting firm Deloitte relocated to 30 Rockefeller Plaza.
The space Gannett plans to take is below that block of 212,000 square feet on the full 25th floor. Asking rents in the 48-story tower range from $80 to $90 per square foot.
Other tenants in the building, include Warner Music Group, Morgan Stanley and the law firm Kasowitz, Benson, Torres & Friedman. Paramount last year signed the sports-news website Bleacher Report to 59,000 square feet in the building.
Representatives for Gannett and Paramount could not be immediately reached for comment.
Newspapers across the country continue to tighten their belts as the industry grapples with declines in print advertising and circulation. Gannett two years ago split its publishing and television/digital operations into separate companies, and has since aggressively pursued acquisitions of newspapers in large markets.
The publisher last year bought North Jersey Media Group – publisher of the The Record – as well as the Wisconsin-based Journal Media Group and the digital-services firm ReachLocal.
Gannett, infamous for large-scale layoffs of journalists, also pursued a $1 billion acquisition of Chicago Tribune publisher Tronc, but the deal fell apart late last year. The company reported revenues of $24.6 million for the fourth quarter, up from $20.4 million a year earlier.
Albert Behler’s Paramount Group, which set a record for the largest initial public offering for a real estate investment trust when it raised $2.6 billion in late 2014, will announce its fourth-quarter earnings next week.
Gordon Ogden at the boutique tenant-representative brokerage Byrnam Wood is negotiating on behalf of Gannett. A CBRE team led by Stephen Siegel, Howard Fiddle and Paul Amrich is handling leasing at Paramount Plaza. The brokers declined to comment.
Correction: A previous version of this article incorrectly stated that Paramount Group owns 1633 Broadway in partnership with Beacon Capital Partners. Beacon Capital sold its interest, and Paramount owns 100 percent of the property.