But other owners are troubled as they watch tech companies retreat. Indeed, the spaces that are vacated are not being filled, said Grant Greenspan, director of the Kaufman organization, which owns about 2 million square feet of buildings near Madison Square Park, about 60% of which are leased to tenants. technologies.
“It has a ripple effect on us,” Greenspan said. “We’re just kind of superseding the water.”
Yelp’s trajectory is in many ways the story of the Midtown South office market, which embraced tech companies as key to revitalizing former garment buildings and white-collar offices.
Yelp, founded in 2004, rented space early on at 100 Fifth Ave., a prewar building on an unlisted block near Union Square that once housed hat businesses. There, in the mid-2010s, the company controlled 70,000 square feet, or about a quarter of the tower. Clarion Partners, which bought 100 Fifth for $230 million in 2013, did not return a call for comment.
Surpassing 100 Fifth after going public in 2012, Yelp then rebounded to 11 Madison, a 31-story, 2.3 million square foot building that once housed insurance company employees. In recent years, tenants have included Sony. Today, Yelp controls 196,000 square feet at 11 Madison, on the 14th, 16th, and 17th floors. As it rose globally, Yelp also leased 50,000 square feet around the corner at 200 Fifth Ave., an 880,000 square foot building owned by L&L Holding Company that once housed toy companies ; it will also be released, Yelp said.
The reason for the early departure is that during the worst of the pandemic, only 2% of its workforce was operating at both 200 Fifth and 11 Madison, Yelp co-founder Jeremy Stoppelman said recently. The company now allows every employee to work remotely.
“We learned that not only could we effectively operate our business as a distributed remote workplace, but that our employees could thrive and be just as, if not more, productive remotely,” a Stoppelman spokeswoman said.
Yelp’s stock price was around $30 on Tuesday, down from the start of the year.
Compared to a decade ago, fewer startups seem to be waiting in the wings, according to brokers and owners.
Indeed, Frame.io, a video platform company that was located at 45 W. 27th St., one of Kaufman’s buildings, recently left after being acquired by Adobe last year for 1.3 billion dollars.
“And nothing comes behind them,” Greenspan said. “We’ll wait and see.”