Summary List Placement
AT&T is reevaluating the huge New York City headquarters of WarnerMedia, multiple sources familiar with the company’s real-estate plans told Business Insider.
The process could result in a substantial downsizing of the 1.5 million square foot space at 30 Hudson Yards on Manhattan’s far West Side, where the mass media and entertainment conglomerate has both its own corporate offices and space for key subsidiaries such as HBO and production studios for the news network CNN.
A person directly involved in the evaluation warned that no decision had yet been reached to shed space. A spokesman for WarnerMedia, Jeff Cusson, told Business Insider that there were no current plans to downsize. A spokeswoman for AT&T declined to comment.
Read More: Facebook scored a $100 million break on its blockbuster NYC office deal, and it could mark the start of a wave of discounts as vacancies soar.
AT&T, however, is expected to complete its review of the space early next year, at which point it will decide whether to cast portions of the sprawling headquarters onto the market for sublease. It has hired the real-estate services firm CBRE to help it complete what it is calling a “strategic review” of the headquarters, sources with direct knowledge of the matter told Business Insider.
Several real-estate executives said that it was widely expected that AT&T would opt to cast off 400,000 square feet or more of the WarnerMedia space, nearly a third of the headquarters. One real-estate executive with direct knowledge of the space and WarnerMedia’s operations within it described the amount it could seek to dispose of as more modest, totaling around 150,000 square feet.
AT&T acquired WarnerMedia, then known as Time Warner, for $85.4 billion in June 2018. Massive corporate mergers often have real-estate implications as companies weed out redundancy and seek to integrate operations.
Amid the Covid-19 pandemic, however, AT&T’s decision to review its New York City footprint comes with additional intrigue. Several major space occupiers have stated that they will embrace remote work for longer periods than initially expected or as a permanent option for employees, potentially reducing their need for office space.
“There are definitely companies that are exploring whether they have excess space,” said David Falk, the New York area president of Newmark Knight Frank. “We all know that when you start doing something new, you fall into a pattern. Some employees have gotten comfortable working from home and when they go back to the office, it could be a hybrid model split between the office and remote work.”
Falk noted that other employees have been eager to return to the workplace.
Read More: IBM is hunting for a 500,000 square foot NYC office as tech tenants continue to double down on deeply-discounted workspaces.
AT&T, which is headquartered in Dallas, is also planning thousands of layoffs at WarnerMedia, according to a recent report in the Wall Street Journal, as the unit’s business has been battered by the virus crisis – another factor that could prompt …read more
Source:: Businessinsider – Finance