Bloomberg News

Time Inc. Said to Weigh Leaving Time & Life Building in Midtown

January 31, 2014

Time & Life Building

The Time & Life Building stands at 1271 Avenue of the Americas in New York. Photographer: Ben Hider/Getty Images

Time Inc., the magazine unit soon to be spun off from Time Warner Inc. (TWX:US), is considering leaving the Time & Life Building on New York’s Avenue of the Americas and moving its offices to lower Manhattan, three people with knowledge of the company’s plans said.

The publisher of such titles as Time, Sports Illustrated, People and Fortune is hunting for about 600,000 square feet (56,000 square meters) of space, according to the people, who asked not to be named because the details of the search are private and it’s early enough for Time Inc. to change course. The company has held talks with the landlords of Brookfield Place, 4 World Trade Center and the former Goldman Sachs Group Inc. headquarters at 85 Broad St, two of the people said.

Leaving the Rockefeller Center-area tower would end an association that goes back to the days of founder Henry Luce, when Time and Life were among the most popular magazines in the world. Time Inc. is being spun off from the parent company it helped to create as an industrywide slump in print advertising contributed to revenue declines in five of the past seven years.

The building “was an icon to me and to a lot of people, representing the confluence of marketing and journalism that came into its greatest power in the ’50s and ’60s,” Daniel Okrent, a onetime Time corporate editor at large and author of “Great Fortune: The Epic of Rockefeller Center,” said in a telephone interview. “Just as there were only a few television networks, there were very few magazines of size that mattered, and they came out of the Time & Life Building.”

Lower Rents

Time Inc. Chief Executive Officer Joseph Ripp wants to move the company downtown to take advantage of lower office rents, two of the people said. Class A space in the Rockefeller Center submarket averaged $82.35 a square foot in the fourth quarter, compared with $53.79 for similar-quality space downtown, according to data from brokerage Cushman & Wakefield Inc.

Rockefeller Group Inc., which owns the Time & Life Building, is trying to retain the publisher as a tenant, two of the people said. Time Inc.’s lease there expires in 2017, the people said.

Teri Everett, a Time Inc. spokeswoman, said she couldn’t comment on the company’s possible move.

The 48-story, 2 million-square-foot skyscraper, also known as 1271 Avenue of the Americas, was developed by Rockefeller Group and Time Inc. in the late 1950s. Marilyn Monroe was among the shovel-wielders at its groundbreaking, according to Okrent.

Declining Sales

Time Inc., which publishes more than 20 titles, will start trading as a new company sometime this year, according to regulatory filings (TWX:US). Separating the magazine unit will shield Time Warner’s more lucrative cable networks and film studio from the publishing industry’s struggles with the transition to the Internet and falling ad rates.

Time Inc.’s sales through the first nine months of 2013 fell 3 percent to $2.38 billion, while operating income climbed 5 percent to $230 million. For 2012, the company’s operating profit was $420 million.

If Time Inc. moves downtown, it will join the New York Daily News and Conde Nast Publications Inc. among media companies that have agreed to leave Midtown for lower Manhattan. Were it to go to Brookfield Place, it probably would take space in 225 Liberty St., the 2.7 million-square-foot tower formerly known as 2 World Financial Center, one of the people said.

Melissa Coley, a spokeswoman for landlord Brookfield Office Properties Inc., declined to comment on any leasing talks. Dara McQuillan of Silverstein Properties Inc., developer of 4 World Trade Center; Fred Pieretti, a spokesman for MetLife Inc., which owns 85 Broad St.; and Dwayne Doherty, a Rockefeller Group spokesman, also declined to comment.

Studley Inc. is representing Time Inc. in its lease discussions, the people said. Adam Smolyar, a spokesman, said the brokerage wouldn’t comment.

To contact the reporters on this story: David M. Levitt in New York at dlevitt@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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