Facebook bets on New York with lease of huge space

New York

FACEBOOK on Monday agreed to lease all the office space in the mammoth 107-year-old James Farley Building in midtown Manhattan, cementing New York City as a growing global technology hub and reaffirming a major corporation's commitment to an office-centric urban culture despite the pandemic.

With the 730,000 sq ft lease, Facebook has acquired more than 2.2 million sq ft of office space in the city for thousands of employees in less than a year, all of it on Manhattan's West Side between Pennsylvania Station and the Hudson River.

Apple, Amazon and Google all lease space in the same area, an emerging tech corridor.

The timing of the deal's announcement was somewhat of a surprise because Facebook, which had expressed interest in the Farley Building for months, has given most of its employees the option of working from home during the Covid-19 pandemic. Even after the pandemic subsides, Facebook has said that within the next 10 years up to half of its roughly 52,200 employees across the country would work from home.

New York's economy has been cratered by the outbreak, and even as the virus has been contained and the city is slowly reopening, many companies have told their employees not to return to their offices until early next year if not later.

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Much of Manhattan's business district remains a virtual ghost town with only a small fraction of workers filling office towers.

But Facebook has more than 4,000 employees in its offices in Manhattan now, up from about 2,900 employees at the beginning of the year.

The company's new office spaces in Manhattan, at the Farley Building and further west at Hudson Yards, could allow Facebook to move another 8,500 workers to the city. The deal at Hudson Yards, signed late last year, includes 1.5 million sq ft in three buildings.

"Vornado's and Facebook's investment in New York and commitment to further putting down roots here - even in the midst of a global pandemic - is a signal to the world that our brightest days are still ahead, and we are open for business," said New York governor Andrew Cuomo in a statement. "This public-private partnership fortifies New York as an international centre of innovation."

A Facebook spokeswoman said it was too soon to estimate how many employees will end up at the Manhattan properties, given the uncertainties of the outbreak.

"Facebook first joined New York's vibrant business and tech community in 2007," the spokeswoman, Jamila Reeves, said. "Since that time, we've continuously grown and expanded our presence throughout the city. The Farley Building will further anchor our New York footprint and create a dedicated hub for our tech and engineering teams."

The Farley Building, most of which was built in 1913, is on Eighth Avenue across from Penn Station and Madison Square Garden. A long-awaited, large-scale renovation of the building is expected to be completed by the end of the year.

Over the past two years, the rapid growth of technology firms, both those from the West Coast and startups in the city, has turned a broad area of Manhattan into a vibrant tech hub.

Late last year, Amazon, which has continued to expand despite backing out of a plan to build a massive campus in Long Island City, Queens, in the face of strong community opposition, added 350,000 sq ft in a building on 10th Avenue near Hudson Yards. It is enough space to bring its workforce in New York City to more than 8,000 people.

Just south along the Hudson River, Google has built an enormous campus that spreads across several buildings in the Chelsea neighbourhood.

Just before the pandemic, Apple signed a lease for 220,000 sq ft at 11 Penn Plaza, a 1923 Art Deco tower a block from the Farley Building that is also owned by Vornado. It was Apple's first expansion in New York City outside its office in the Flatiron district.

Julie Samuels, the executive director of Tech: NYC, a nonprofit industry group, said that Facebook's decision on Monday was a vote of confidence in the future of New York and its growing tech industry.

"It's great news that affirms what we've always known - even facing economic uncertainty and a global pandemic,'' Ms Samuels said, "New York is overflowing with the creativity and potential that will drive the growth of the next generation of technology companies." NYTIMES