Facebook Closes Massive New York Office Expansion

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The biggest lease of the year has ended – and that’s great news for a lame office rental market in a city besieged by the coronavirus.Facebook on Monday struck a long-awaited deal for 730,000 square feet at Vornado’s Farley Building, the former post office located between Madison Square Garden and the Hudson Yards neighborhood.

The publicly traded social media giant and the real estate giant had been in discussion for the past year. But skeptics doubted Facebook would move forward with New York’s expansion amid the coronavirus crisis. Facebook’s Mark Zuckerberg himself took a bitter note when he predicted in May that half of his employees would be working from home within a few years.

It didn’t help matters when the deal dragged well beyond a hoped-for Memorial Day completion date.

Now that it’s done, Facebook’s pledge should put an end to the endless chatter that central office districts will never recover from the COVID pandemic.

CBRE tri-state CEO Mary Ann Tighe, who was not involved in Farley’s negotiations, called Vornado chairman Steven Roth and his company’s New York chairman David Greenbaum and leasing manager Glen Weiss of “heroes of our city today”.

She said: “Despite all the talk about working from home and the nonsense of devaluing big cities, one of the global tech giants has chosen to go long – in fact, in combination with Hudson Yards [where Facebook also has space], go longer – to New York and to work from work.

“It is proof, for those who always seem to need it, that our city remains a magnet for talent.”

The Farley Building is part of Vornado’s $ 2 billion investment in the Penn District, where it has 10 million square feet of space. The Beaux-Arts-style monument occupies the entire superblock demarcated by Eighth and Ninth Avenues between West 31st and 33rd Streets.

In addition to the Facebook floors, the building will contain a new Moynihan train room as well as 120,000 square feet of store and restaurant space. The whole project is to be completed by the end of 2020.

Roth de Vornado said Facebook’s move “is yet another testament to New York’s extraordinary talent and strengthens New York’s position as the nation’s second-largest tech hub” after Silicon Valley.

Facebook vice president of real estate Robert Cookson said Facebook “will further strengthen our New York footprint.” The company also owns over 1.5 million square feet in the Hudson Yards of related companies and additional space at 770 Broadway in Vornado.

The Midtown office market has shown counterintuitive strength over the past two months despite a miserably slow second quarter.

Other significant recent transactions include AIG for 325,000 square feet at 1271 Sixth Ave., TikTok for 230,000 square feet at One Five One, formerly known as Four Times Square, and Raymond James for 160,000 square feet at 320 Park Ave.

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