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- 11/01/11--08:19: Yelp is on the Way!
Right from the gate, the Invesco Real Estate-Kaufman Organization partnership behind 100-104 Fifth Avenue followed a simple motto: Go big on tech or go home.
Since acquiring the building in January 2011, the Kaufman Organization has leased 100,000 square feet to new tech tenants, including 45,000 square feet to Apple’s iAd mobile advertising unit.
“We’ve been on a tear,” said Grant Greenspan, a principal at the Kaufman Organization.
Last week, the firm unveiled another new tenant that, when compared with Apple, was smaller in size but, in the tech world, arguably just as relevant.
Yelp, a San Francisco-based online review site, unveiled its new 9,505-square-foot office space, complete with the typical trappings of a Silicon Valley start-up office: a beer-tap controlled by an iPhone app that monitors the beer’s temperature and conference rooms named after classic Nintendo games.
Like all young tech companies, Yelp injected its offices with a shot of youthfulness, entirely antithetical to the straight-and-narrow design of more traditional corporate tenants.
Whereas 20 years ago some landlords might have been suspicious of a company like Yelp—not to mention its skateboard-riding, beer-swilling employees—Mr. Greenspan laid out the welcome mat.
Now with a building that boasts Net-a-Porter.com (which leased 32,144 square feet in May) and Interactive Partners (which signed a 10-year lease for 5,400 square-feet in August), Kaufman has turned its Union Square property into a hub where web designers and online marketers co-exist under one roof.
“There is no synergy or bond between one financial hedge fund and someone who does aircraft leasing or equipment,” said Mr. Greenspan. “[At 100-104 Fifth Avenue] there is a bond in terms of employees, creativity and, for whatever reason, there is a clustering effect that takes effect here.”
Yelp was represented by Scott Gamber and Paul Milunec of CB Richard Ellis. Mr. Gamber and Mr. Milunec declined an interview request. Yelp declined to participate in the story. Mr. Greenspan declined to share the specifics of the lease.
Yelp’s new office will eventually house 100 employees and it recently added 20 full-time employees.
At Yelp’s press conference last week, Mayor Bloomberg told reporters that the new office space was “the latest proof that New York gets five stars as a home of growing and innovative tech companies.”
Although the city had little involvement in Yelp’s lease negotiations, the mayor’s office wanted to make sure the young firm had the opportunity to expand. The company has an option for contiguous space, sources familiar with the deal said last week.
“We want to make sure they keep expanding,” said Chris Coffey, director of external affairs in the Mayor’s Office of Media and Entertainment. “The city is doing everything it can do to create an environment that is the best possible one for companies like Yelp.”
jhanasobserver100 5th avenue
Venture capital firm FirstMark Capital landed in a veritable hornets nest of digital activity after it agreed to a 10-year lease at 100-104 Fifth Avenue, a tech-trendy building that already has Apple and Yelp
as one of its many social media tenants.
FirstMark Capital, which counts Pinterest and Lumos Labs among its many seed investments, will be moving out of its 19th floor office on 120 West 45th Street for 10,600 square feet in the Kaufman Organization-owned building. Bruce Rothman of Studley represented FirstMark Capital in the deal. Grant Greenspan represented the Kaufman Organization in-house.
Since buying the pre-war building in January 2011, Kaufman Organization has lured in a steady stream of tech and social media tenants, including Interactive Partners and Net-A-Porter.
Mr. Greenspan estimates that two-thirds of the 270,000 square feet at 100-104 Fifth Avenue is being occupied by a digital-themed tenant.
“They want the antiquity, but they also want the modern connectivity,” said Mr. Greenspan, adding that Kaufman has also vastly upgraded the building’s telecommunications capabilities to accomodate these tenants.
It was such improvements to the buildings, and additions to its tenant roster, that attracted FirstMark to the space.
“They sought out the building,” said Mr. Greenspan. Mr. Rothman could not be immediately reached for comment.
The feel of FirstMark’s new office will be “techy,” he added.
“I want to describe it as few offices, large, open-type space with glass conference rooms,” he said. “It’s going to be a very modern type of office space.”
Asking rent in the building is $55 a square foot. Kaufman and Invesco, the co-owners of the building, are currently embarking on a $9 million capital improvement program to upgrade the building’s lobbies, elevators, and infrastructure.
FirstMark Capital has nearly $2 billion in capital commitments. It did not respond to a request for comment.