The Real Deal New York

Scripps, Discovery zero in on new HQ

Companies shortlist 441 Ninth Avenue and 1250 Broadway ahead of $15B merger
By Rich Bockmann | January 16, 2018 11:30AM

Rendering of 441 Ninth Avenue and 1250 Broadway

Scripps Networks Interactive has shortlisted a pair of buildings for a new Manhattan headquarters that could be as large as 400,000 square feet, sources told The Real Deal. The negotiations come as Scripps gets ready to consolidate its footprint amid a proposed $15 billion merger with Discovery Communications.

Cove Property Group’s 441 Ninth Avenue on the Far West Side and Global Holdings’ 1250 Broadway at the edge of Koreatown are on the shortlist, sources told TRD.

A representative for Cove declined to comment, and Global did not respond to requests. A spokesperson for Scripps referred calls to Discovery, which could not be immediately reached. JLL’s Cynthia Wasserberger is representing Scripps in negotiations. She was not available to comment.

Scripps, which owns television brands such as Food Network and HGTV, is headquartered in Knoxville, Tennessee, and Discovery has its corporate offices in Silver Spring, Maryland. But the two have several locations spread throughout Manhattan, and are looking to consolidate as they prepare to finalize the $14.6 billion merger announced in July.

Discovery, which reportedly has a lease at MHP Real Estate Services and HNA Group’s 850 Third Avenue covering roughly 160,000 square feet, announced last week that it would relocate to the Big Apple by 2019. The company reportedly plans to sell the 10-story building that was completed in 2003 and has an assessed value of $148 million, where according to CoStar it occupies roughly 550,000 square feet.

Scripps, meanwhile, has a pair of leases expiring in 2021, and had reportedly been eying a spread at Brookfield Property Partners’ Manhattan West last spring. The current search is focusing on buildings within the vicinity of the Far West Side.

The TV network has offices at Jamestown Properties’ Chelsea Market, where it reportedly has a lease covering about 165,000 square, and at HNA and MHP’s 1180 Sixth Avenue, where it occupies about 120,000 square feet. Both leases expire in mid-2021.

It wasn’t immediately clear exactly how much space the combined companies will need. The merger will lead to a consolidation of space, and Discovery is still deciding how many jobs it will relocate from Maryland. But sources said the new office could be anywhere in the range of 200,000 to 400,000 square feet.

Kevin Hoo’s Cove Property and the hedge fund Baupost Group paid $330 million in 2016 to buy the 423,000-square-foot former EmblemHealth building at 441 Ninth Avenue, which is just a stone’s throw away from the megadevelopments rising in Hudson Yards. They are working on a gut renovation of the property and constructing 17 new stories on top for a total size of 700,000 square feet.

Eyal Ofer’s Global Holdings, meanwhile, paid $565 million in 2016 to acquire 1250 Broadway, which it’s rebranded as the Nomad Tower. The building will have an available block of 435,000 square feet when the Visiting Nurse Service of New York relocates to SL Green Realty’s 220 East 42nd Street, also known as the Daily News Building.

Asking rents for the block range from $78 to $82 per square foot.
A CBRE team led by Stephen Siegel is handling leasing at 441 Ninth, while a team at JLL headed by Mitch Konsker is marketing 1250 Broadway.

The Scripps-Discovery deal is the latest in a string of mergers and acquisitions shaking up New York City real estate.

The Walt Disney Company in December announced a $52.4 billion deal to acquire most of 21st Century Fox, which could see a shakeout of their properties in the city. And CVS nixed health insurer Aetna’s plans to relocate to the Meatpacking District on the heels of their $69 billion merger.