May 22 (Bloomberg) -- Time Inc., the magazine unit to be spun off from Time Warner Inc. next month, will move its headquarters to Brookfield Place in lower Manhattan next year.
The publisher of Time, Sports Illustrated and Entertainment Weekly said it signed a long-term lease for 700,000 square feet (65,000 square meters) on six floors at 225 Liberty St. The announcement means the company will leave the Time & Life Building on 50th Street and Avenue of the Americas, where it has been since the property was completed in 1959.
“We spent months evaluating competing sites in New York and New Jersey,” Chief Executive Officer Joseph Ripp said in a statement. The company was persuaded by the downtown Manhattan location, Brookfield Office Properties Inc.’s plans for the property and an incentive package from New York state, he said.
Time Inc. is being spun off from the parent company it helped to create as an industrywide slump in print advertising contributed to revenue declines in five of the past seven years. For Brookfield, the publisher’s move means that about 3 million of the 4.2 million square feet in the complex left behind last year by Bank of America Corp. has been spoken for, the New York-based landlord said in its own statement.
Brookfield has been remaking the five-building complex, formerly known as the World Financial Center, stripping away brass and marble trims and installing bicycle racks, public Wi-Fi, and other amenities designed to make it more appealing to technology and media firms. It is also in the midst of a $250 million renovation of its retail and restaurant areas, with Hudson Eats, a food court overlooking the Hudson River, set to open in the next few weeks.
In November, the law firm Jones Day agreed to take 330,000 square feet at 250 Vesey St., the former 4 World Financial Center.
“A year ago at this time, they were facing a third of their complex being empty,” said Kenneth McCarthy, chief economist at commercial-property brokerage Cushman & Wakefield Inc. “The fact that they were able to sign two very large tenants in so short a time has made a huge dent.”
McCarthy said Time Inc.’s deal also bodes well for leasing at the World Trade Center across the street, where 2.4 million square feet of space are available in two new skyscrapers, including 1 World Trade Center, the Western Hemisphere’s tallest building. Cushman is the leasing broker for that tower.
Teri Everett, a Time Inc. spokeswoman, declined to disclose financial terms of the lease. She said all of the company’s staff from the Time & Life Building and 150 W. 50th St. will be moving to Brookfield Place.
Time Inc. is receiving $10 million of state incentives, said Jason Conwall, a spokesman for New York’s Empire State Development Corp. Those consist of a $7 million grant from the Job Creation and Retention Program, a federally funded post-9/11 benefit designed to lure and keep jobs in lower Manhattan, and a $3 million Excelsior Tax Credit aimed to keep jobs in the state.
The magazine publisher’s departure from its namesake building in the Rockefeller Center area will end an association that goes back to the days of Time Magazine’s founder, Henry Luce. The 34th floor, where the most-senior executives kept their offices, was a model for the television show “Mad Men,” as a representation of 1960s corporate culture, Daniel Okrent, Time’s onetime corporate editor, said in a January interview.
Rockefeller Group Inc., which owns the 48-story tower, is planning a major capital-improvement program at the building, to be known as 1271 Avenue of the Americas, Dwayne Doherty, a spokesman, said in an e-mailed statement.
Time Inc.’s lease runs out at the end of 2017, giving the company time to market 1.9 million square feet in the building, he said.
The lease with Brookfield was brokered by a team from Studley Inc. led by Mitchell Steir, the firm’s CEO, and President Michael Colacino, the magazine company said in its statement.
Brookfield is negotiating with Bank of New York Mellon Corp. for about 400,000 square feet at 225 Liberty St., a person with knowledge of the discussions said earlier this month. The bank yesterday announced it had agreed to sell its headquarters tower at 1 Wall St.
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