Apple eyes Penn 11
Looks to take on Macy’s sublease
AFTER
losing to Facebook in a tug-of-war over the historic Farley Building, tech giant Apple is negotiating to lease office space at 11 Penn Plaza, sources said.
The 1.15-million-squarefoot building owned by Vornado has 638,921 square feet available from the fourth through 14th floors as a sublease from Macy’s, with some square footage ready to be occupied.
Sources say Apple is negotiating for roughly 200,000 to 300,000 square feet of this space in the middle of the building, which holds down the entire eastern blockfront along Seventh Avenue between West 31st and 32nd streets, catercorner to Madison Square Garden.
Apple may eventually need more space and target another property, advised a source familiar with the tech company’s needs. “But it solves a current problem,” this person said, explaining that the iPhone maker is bursting out of its local digs at 100-104 Fifth Ave. in the Flatiron District, where it has just over 52,000 square feet.
Apple could also help Macy’s get out of part of its lease as the department store moves its offices to Long Island City, sources said.
Vornado has two choices. It can approve the sublease and leave Macy’s on the lease — or take on Apple’s creditworthiness, sign a direct lease with Apple, and drop Macy’s from the rent obligation that would only occur if Apple defaulted.
Real estate executives who are not involved in the talks but familiar with the
companies say Vornado will likely want to deal directly with Apple.
Either way, spies say the deal would be in the mid-$60s per square foot, a bargain over new towers where rents start at $100 per square foot and up.
A CBRE team of Scott
Gottlieb, Liz Lash and Ross Zimbalist is handling Macy’s sublease, which can be extended through April 30, 2035.
The 1923-era building Apple is targeting was recently rebranded by Vornado as Penn 11. The former Equitable Life Assurance Building was designed by Starrett & Van Vleck. It has a distinctive high-arched entryway that leads into an ornate vaulted lobby that was restored in 1993.
The floors stretch from over 60,000 square feet at the base to over 50,000 square feet in the middle. The top floors, leased by AMC, are set back like a wedding cake and floors are smaller. As a C-shaped building, it has five sides of windows with ceilings ranging from 14 to 16 feet high, says the marketing brochure.
At the nearby Farley Building, Vornado’s renovation of the building housing the post office at 390 Ninth Ave., Apple wanted to only lease a few hundred thousand feet while Facebook agreed to take all 740,000 square feet. That lease is still under negotiation.
The companies involved naturally declined comment or did not return requests for comment. Paul McCartney, George Harrison, Mark Ron
son and Rodgers and Hammerstein all have catalogs represented by Concord, which is consolidating its offices at 250 W. 57th St.
The world’s largest independent developer, manager and acquirer of music recordings, music publishing and theatrical performance rights for artists will be moving into 46,329 square feet. The space is on the entire f ifth and sixth floors of the building, which sits across from the new Nordstrom and by the entrance to Turnstyle’s underground subway market.
Concord’s Samuel French theatrical agency has been in the Flatiron District, while its Tams-Whitmark theatrical and Kidz Bop divisions were in Greenwich Village. The company also represents Andrew Lloyd
Webber and last year acquired Pulse, which controls 400,000 works.
The West 57th Street building and area have historically been home to entertainment firms. Other building tenants include ASCAP and the Universal
Music Group.
CBRE’s Paul Haskin, who repped Concord, said: “The renovation and refurbishing of the lobby, combined with the renovation of the property and the access to the public transportation all pointed for a very y strong reason for Concord to return to the roots of the industry.”
The Empire State Realty Trust building owner was represented by the Cushman & Wakefield team of
Rob Lowe, Harry Blair, Sean Kearns, Paige Engeldrum and Dan Organ,
along with Keith Cody and Leslie Nadel in-house. The asking rent was $69 per square foot.
Prime Fifth Avenue has scored a new retail tenant. Spanish retailer Desigual has leased 5,200 square feet at 605 Fifth Ave. between East 48th and 49th streets, with 2,300 feet on the ground level and the rest lower-level storage. The current tenant, Sunglass Hut, H is moving across
the avenue.
Jason Greenstone, Michael O’Neill and Taylor Reynolds of Cushman & Wakefield represented the tenant. The owner’s rep was Roy Dervich of Breakwater Holdings. The companies declined or did not return requests for comment. The Barcelona-based fashion brand recently reopened its flagship at 958 Sixth Ave. with a fully painted façade by Okuda San Miguel.