Media Industry Goes South - Capital New York

By: Joe Pompeo | Capital New York

Media companies are starting to make a bigger dent in the downtown real estate market.

In 2013, media accounted for 15 percent of all leases signed in Lower Manhattan, up from 7 percent in 2005, according to the Alliance for Downtown New York's latest year-in-review, which was released on Wednesday.

By contrast, the combined category of finance, real estate and insurance accounted for 27 percent of leasing activity last year, down from 56 percent in 2005, the report shows.

"This represents a sizable shift in the market share," said Nicole Kolinsky, an Alliance spokeswoman.

It's also a sign of what appears to be a burgeoning media boom in Lower Manhattan, where finance has long had a major foothold and the tech industry has established a large presence as well (600 companies south of Chambers Street).

Now, more and more media companies are dropping anchor at the bottom of the island.

From 2011 through the first six months of last year, 15 media companies, including American Media Inc., HarperCollins and The Village Voice, committed to relocating within the area, bringing the total number of media tenants to around 80, according to the Alliance's October 2013 report on Lower Manhattan's technology and media landscape.

The most notable newcomer is magazine giant Conde Nast, which inked a deal with the Port Authority and The Durst Organization in May 2011 to anchor 1 World Trade Center. Conde is expected to begin moving in later this year.

In December, the global advertising titan GroupM signed on as the anchor tenant of Larry Silverstein's 3 World Trade Center, negotiating a deal for space that was originally conceived with a financial firm in mind. The 500,000-square-foot lease accounts for 20 percent of the 2.5 million-square-foot tower’s office space and "represents a significant milestone in the development of this project," the new Alliance report states.

Other media tenants in the vicinty include Fast Company and Inc. at 7 World Trade Center; the Daily News at 4 New York Plaza; and IBT Media, which now owns Newsweek, at 7 Hanover Square. A bit farther north, The Financial Times moved from its headquarters near the United Nations to 300 Hudson St. in October.

Time Inc. is reportedly considering a southward move as well. According to Bloomberg News, the magazine publisher has held talks with the landlords of 4 World Trade Center, Brookfield Place and the former Goldman Sachs headquarters at 85 Broad St.

"It's an exciting place for media and advertising in particular," said Jessica Lappin, the Alliance's new president. "Those sectors accounted for some of the year's biggest deals."

Another big upcoming move (though not downtown) is Time Warner, which is headed to the Hudson Yards redevelopment. Between Time Warner, Conde Nast and potentially Time Inc., Midtown Manhattan is set to lose a significant share of its media footprint.

We'll have more on the ways in which the media industry is transforming Lower Manhattan in a feature from the next issue of Capital's monthly print magazine, which is due out February 24.

News: 02.14.2014