Savills Helps Prestigious Publishing Company Secure Significant Upgrades at Below Market Rent
W.W. Norton & Company (“Norton”), the largest employee owned, independent publishing company, had occupied the same office at 500 Fifth Avenue for over 40 years. In addition to being a leader in textbook publishing and non-fiction books, Norton was experiencing strong growth in their digital media divisions. Six years prior to this transaction, Norton was in need of immediate growth space and had a proposal from the landlord for a potential long-term lease renewal. Since Norton was unsure of their long-term real estate needs, Savills was retained and advised them to lease the necessary growth space and only commit to a very short-term lease extension. This provided Norton with sufficient time to better define their long-term space needs and wait as the real estate market declined.
Fast forward to 24 months prior to the new lease expiration, Savills set forth to find a solution that would meet Norton’s long-term goals. These goals included a new efficient and collaborative workplace in a building with modern infrastructure, two features not then being provided by 500 Fifth Avenue. Firstly, Savills led a team of architects, engineers and project managers in determining what upgrades would be imperative if Norton were to consider renewing its lease. Next, Savills conducted an exhaustive search of the market, covering neighborhoods that would offer cost savings for Norton as well as the opportunity to relocate into modern efficient space. Savills led Norton on tours of buildings in Downtown Manhattan, Brooklyn and Jersey City, submarkets offering generous municipal incentives.
Armed with several viable relocation options in Jersey City, Downtown and Midtown, Savills now had the leverage it needed with Norton’s existing landlord at 500 Fifth Avenue. Savills was ultimately able to negotiate a 20-year renewal at 500 Fifth Avenue at a below market rent with significant landlord concessions, which fully funded a staged renovation of their entire premises. Base building upgrades secured from Norton’s Landlord included an all new HVAC system with extended service hours, new windows, life safety systems, and a private useable terrace. In addition, Savills negotiated for significant lease flexibility in the form of options to grow and contract over time.