Amazon inked one of Manhattan’s largest office leases this year as it quickly expands its footprint in New York and other markets.
The move comes after the company acknowledged it didn’t have enough space to accommodate all of the employees it had called back to their workspaces five days a week.
The Seattle-based tech giant leased 330,000 square feet across floors 3 to 11 in a 15-year deal at 10 Bryant Park, said landlord Property & Building Corp., or PBC, one of Israel’s largest construction firms, in a filing made Thursday with the Tel Aviv Stock Exchange. The building formerly was known as HSBC Tower.
Amazon also has the option to lease about another 145,000 square feet at the property’s adjoining 10-story neighbor, the landmark Beaux-Arts property known as the Knox Building.
The 30-story 10 Bryant Park, at 452 Fifth Ave. between 39th and 40th streets and just south of the park itself, is across the street from Amazon’s New York flagship location at the former Lord & Taylor department store that it bought and redeveloped.
Amazon and PBC did not immediately respond to requests for comment from CoStar News. JLL, the exclusive leasing agent for the building, declined to comment.
Amazon asked its employees to return to the workplace five days a week beginning Jan. 2, but it had to postpone the return date for some because it didn’t have enough room for everyone in some cities, including New York.
PBC said the agreed-upon rent for Amazon's 330,000 square feet at 10 Bryant Park totals approximately $29.5 million per year. That translates to about $89.40 per square foot per year. The rent is set to escalate after five and 10 years.
Free rent included
Amazon has full or partial early termination rights after 10 years. PBC is expected to hand the space to Amazon no later than May 31 and is set to spend about $53.8 million to overhaul the leased office space.
As for concessions, Amazon is entitled to a free lease period of 16 months.
Besides the most recent lease, Amazon has expanded its footprint via a mixture of direct leases, subleases and a partnership with global flexible workplace provider WeWork in New York and other cities such as Miami and Mountain View, California.
As more employers have instituted stricter in-office rules, real estate executives have said office markets led by New York are set to benefit, even as uncertainty swirls and affects investor sentiment in the wake of tariffs imposed by the U.S. in early April.
SL Green, Manhattan’s largest office landlord, said Thursday it’s not seen any office leasing pullback as a result of the tariff situation.
“You have tenants with a real need for space,” led by the return-to-office trend after “years of hybrid” work patterns, SL Green Chief Executive Marc Holliday said Thursday. “People are back and need space. We see that all over the market. We are feeling good about the [office] occupancy level and the volume.”
For PBC, Amazon’s lease is another sign the property can attract major companies and land deals after HSBC’s decision to leave its space for a new U.S. headquarters at Tishman Speyer’s Spiral building on the far west side of Manhattan.
PBC said last year it would overhaul 10 Bryant to ensure it remains a “trophy, modern” tower after successfully issuing bonds to pay off a $385 million outstanding loan to lender JPMorgan Chase. The building has since landed a slew of leases with tenants including 17Capital, a private equity firm that is moving from SL Green’s trophy tower One Vanderbilt.
The Real Deal earlier reported Amazon’s lease deal at 10 Bryant.