While a $16 million a year lease would be considered a ‘showstopper’ in any market, Warner Music Group’s 288,250-square-foot lease this week is especially welcome in Manhattan, where entertainment firms continue to sign the biggest CRE deals in the Big Apple, helping to fill the void left by the largely sidelined Wall Street firms.
Warner Music Group’s lease for its new worldwide headquarters ranks as the third-largest signed this year in that market. Entertainment firms have accounted for three of the four largest leases signed so far this year, and two of the four largest sales.
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The lease between Warner Music and Paramount Group is for office space
at 1633 Broadway in midtown. The initial term of the lease runs 16 years and includes a single option to extend the term for either five years or 10 years. In addition, Warner Music has the ability to lease additional space in the building and has a right of first refusal with regard to certain additional space. The company is moving from its long-time headquarters at 75 Rockefeller Center. That lease was set to expire next summer.
CBRE represented Paramount Group's building in the deal, while the tenant brokerage information has not been released.
Paramount Group also renewed a lease with Showtime this year at 1633 Broadway.
Sony figured in one of the four largest sales and leased this year when it agreed to sell and leaseback its building at 550 Madison Ave. to Chetrit Group LLC, a New York-based developer, owner and investment firm, for $1.1 billion, or about $1,300 per square foot. Sony then signed for more than 798,000 square feet.
Also this year, Comcast Corp.’s deal to acquire General Electric’s entire 49% common equity stake in NBCUniversal for $16.7 billion included a separate deal in which it purchased the properties used by NBCUniversal at 30 Rockefeller Plaza and CNBC’s headquarters in Englewood Cliffs, NJ, from GE for $1.4 billion.
Biggest Entertainment Show Still to Drop
Meanwhile, the biggest NYC entertainment lease is still lurking offstage but may be set to make a dramatic appearance.
The Related Cos. and Oxford Properties Group Inc. are developing up to 16 high-rises totaling more than 13 million square feet of office, residential, hotel and retail space
on 26 acres bordering the West Side Rail line along the Hudson River.
Related, Oxford and architect/master planner Kohn Pedersen Fox are reportedly negotiating with Time Warner to take approximately 1 million square feet in one of those towers, leaving its current headquarters at Columbus Circle.
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