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Like many of its clients, one major brokerage firm is rethinking its Manhattan office space needs.
Cushman & Wakefield is considering moving out of Vornado Realty Trust’s 1290 Sixth Ave., the brokerage company’s New York City headquarters for the past 13 years, when its lease is up in 2023, Cushman & Wakefield Tri-State CEO Toby Dodd told Commercial Observer.
The company is in the beginning stages of making this decision and employees were told of the prospect of relocation on Wednesday, CO reported. Cushman & Wakefield has occupied the 42-story skyscraper since 2008, when it moved its three Midtown locations at the time into the 156K SF three-floor space. Former President Donald Trump’s company, The Trump Organization, owns a 30% stake in the building.
As part of the deal, the brokerage firm agreed to pay $88 per SF and Vornado agreed to let the firm be the exclusive leasing agent in the building to potential tenants, The New York Times reported in 2010. The average asking rent for Midtown office space as of Q1 2021 is about $80 per SF, according to Colliers.
Cushman & Wakefield also scored nine months of free rent and an estimated $8.6M in tenant improvement funding from the landlord when it signed the lease more than a decade ago, per the Times.
Since then, it has brokered big deals for Vornado at the address. It represented Vornado in 2019 when law firm Linklaters took up 90K SF for an asking rent of $89 per SF, Crain’s New York Business reported.
Several tenants in other buildings Trump owns, such as 40 Wall St., have looked to get out of their spaces in light of the Jan. 6 riot at the Capitol.
Vornado was reportedly looking to cut ties with the former president’s company earlier this year after failing to secure a buyer for the two buildings or a lender to refinance them, The Wall Street Journal reported in February. Vornado CEO Steven Roth denied that this was the case in an earnings call later that month.
Dodd told CO that the prospect of the move was an effort to "be a showcase of the advice we give," not because of Vornado’s management.
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