Yahoo, the giant Web company that agreed on Sunday to buy Tumblr for $1.1 billion, is moving its New York headquarters to the former home of The New York Times, on 43rd Street, east of Eighth Avenue, where it plans to expand.
Yahoo is talking to city officials about erecting a large illuminated sign with its name on the cupola at the top of the building, where The Times once had its own sign.
The move, announced on Monday, illustrates the rapid growth and importance of the technology industry in the city’s economy.
Yahoo, which has signed a long-term lease for the 9th through 12th floors in the 15-story building, is joining two other tech tenants there: 10gen, which makes database software, and Citysearch, the local search engine.
Yahoo is based in Silicon Valley. The company, which now has about 500 employees in three buildings in New York City, said it expected to expand its work force in the city to 700 within the next couple of years, particularly in the engineering area. Microsoft is moving to 11 Times Square and Facebook is nearby.
“For a while now,” Marissa Mayer, Yahoo’s chief executive, said, “Yahoo has been looking for a home here in New York. We have several hundred employees spread across several offices. And I’m proud to say that we’ve found it.”
The company’s New York employees currently work at 1065 Avenue of the Americas (at 40th Street), 1540 Broadway (at 45th Street) and 11 West 19th Street.
Lately, Ms. Mayer has focused on reinvigorating the company, armed with billions of dollars in cash from the sale of half its interest in the Chinese Internet company Alibaba. On Sunday, Yahoo agreed to pay cash for Tumblr, a blogging service.
Tumblr’s 175 employees work from offices at 35 East 21st Street, and they will not move to Times Square. In order to attract employees, Yahoo plans to install the kind of amenities at the former Times building that are common at tech companies, including outdoor terraces and a cafeteria with an extensive menu of free food.
It would be similar to the setup at Google, which paid $1.8 billion for a building in Chelsea, at 111 Eighth Avenue. Google now has about 3,000 employees in the city.
“Since the Lehman Brothers collapse, tech has been carrying the New York City economy,” said Jonathan Bowles, director of the Center for an Urban Future, a research organization. “It’s been an engine of growth and has helped diversify New York’s economy beyond Wall Street. They’re creating jobs and eating up more real estate.”
The fortunes of the former Times building have closely followed the rise and fall of the real estate market. Tishman Speyer Properties bought the property from The New York Times Company in 2004 for $175 million, after The Times announced plans to build a new headquarters several blocks away, on Eighth Avenue between 40th and 41st Streets.
Less than three years later, Tishman Speyer sold the building to Africa Israel USA for $525 million. The buyer spent $100 million on gutting and renovating the property in an effort to transform it into a first-class office building.
But the real estate market went into a tailspin, and Africa Israel was crushed under the weight of $711 million in loans. The company scrapped plans for wooing office tenants, and instead signed deals with Bowlmor Lanes, an upscale bowling alley, and Discovery Times Square, an exhibition hall, for the lower floors.
In 2011, the Blackstone Group, an investment firm, bought the bulk of the building, the top 11 floors, for $160 million. Blackstone abandoned plans for luring financial institutions and other corporations to the building, focusing instead on the growing tech sector.
Article source: http://www.nytimes.com/2013/05/21/nyregion/yahoo-to-consolidate-new-york-headquarters-in-times-square.html?partner=rss&emc=rss
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