On Amazon’s wish list: A 250K sf office in New York

Retailing giant makes switch from Cushman to JLL after ugly commission battle

From left: 7 West 34th Street, Jeff Bezos and Derek Trulson
From left: 7 West 34th Street, Jeff Bezos and Derek Trulson

Amazon hasn’t even finished fulfilling your last-minute holiday orders, but it’s already working on its own wish list for 2017. The retailing behemoth is going to be looking for a new office as large as 250,000 square feet next year that it can occupy by 2018, sources told The Real Deal.

In 2009, Amazon moved into just 10,000 square feet at SL Green Realty’s [TRDataCustom] 1350 Avenue of the Americas, and has since expanded to more than 132,000 square feet a the 34-story tower, CoStar data show. In late 2014, the company inked a huge deal for 470,000 square feet at Vornado Realty Trust’s 7 West 34th Street.

But that footprint is proving insufficient to fulfill all those orders for refrigerator water-filters and wire bangle bracelets, as Amazon needs another 250,000 square feet of space. One source said the company will be actively touring early next year, and is in a rush to find a new location it can occupy by 2018.

A spokesperson for Amazon could not be immediately reached for comment.

The deal at Vornado’s property was long rumored to be the first location for a mini-warehouse in the building’s retail space where customers could pick up same-day deliveries, but it never came to fruition. Earlier this year, Cushman & Wakefield found itself in the middle of a heated legal battle over commissions on the lease.

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Cushman veteran James Rougan filed a lawsuit against the brokerage in May, claiming he was stiffed on a $1 million commission for helping to negotiate the deal. Rougan claimed he had an agreement to split commissions on any Amazon deal with colleague Jeff Heller dating back to 2011, when the two secured space for the tenant’s Williamsburg photo studio at 35 Kent Avenue – an agreement the employer allegedly refused to enforce.

Cushman sacked Rougan after he took his claims to court, and sources at the time said Amazon was incensed over the bad press. Amazon has now turned to a team at JLL led by broker Derek Trulson to handle the search.
Trulson, a Seattle native whose father developed multifamily properties in Amazon’s hometown city, has worked with other Emerald City tenants in the Big Apple such as Nordstrom.

Trulson could not be immediately reached for comment, and a representative for Cushman said the company does not comment on pending litigation.

Earlier this year, Korea Post, one of South Korea’s largest investment funds, bought a 47-percent stake in 7 West 34th Street in a deal that valued the property at $561 million.