Twitter Inc (NYSE:TWTR) has decided on a move that works contrary to the “Go west young man” spirit of Horatio Alger’s characters and the Joad family. Rather than seeking opportunity by heading west, Twitter is moving the opposite way, to New York City. Specifically, Twitter has announced that the company, whose stock has doubled since going public last year, will be moving to Chelsea. The midtown south area has, in recent years, become increasingly popular with both technology and media companies.
Twitter’s new office space
Twitter Inc (NYSE:TWTR), based in San Francisco, announced today that it had signed a lease for 140,928 square feet at 245 W. 17th St. and 249 W. 17th St., adjacent buildings between Seventh and Eighth avenues owned by Savanna.
Midtown south is roughly comprised of the area between 30th and Canal streets and has the lowest office vacancy rate to be found in the United States. With the move Twitter Inc (NYSE:TWTR) will find itself with Google Inc (NASDAQ:GOOG) as around-the-corner neighbors. In 2010, Google purchased a converted freight terminal at 111 Eighth Avenue for $1.84 billion.
Savanna, the New York-based private-equity firm, bought the buildings that it will rent to Twitter Inc (NYSE:TWTR) in 2012. The firm than shelled-out $21 million over nine months renovating the properties in order to give them the “loft feel” often craved by tech companies.
“We specifically targeted the aesthetic that companies like Twitter Inc (NYSE:TWTR) are after,” Savanna’s VP said in an interview. “This particular area of Chelsea, being a block from Google, the entire area is an epicenter that attracts talent.” Twitter is expected to get moved in later this year. Hoo, said that the details of the lease are bound by a non-disclosure agreement.
Tech in Chelsea
Google Inc (NASDAQ:GOOG) and Twitter Inc (NYSE:TWTR) are hardly the only recognizable tech firms to move to New York.
Among other technology companies that have taken space in midtown south since the Google deal is International Business Machines Corp. (NYSE:IBM), which this month agreed to lease 120,000 square feet at 51 Astor Place, a new tower in the East Village, for its Watson unit. Facebook Inc. (NASDAQ:FB) is renting offices at 770 Broadway, across the street from 51 Astor.
Landlords in midtown south sought rents averaging $62.61 a square foot in 2013, a 26 percent jump from the previous year, according to Cushman & Wakefield Inc. The market’s vacancy rate at the end of December was 8.6 percent, the lowest in the U.S., followed by San Francisco at 9.1 percent, data from the real estate services firm show.
Companies such as Google Inc (NASDAQ:GOOG) and Twitter Inc (NYSE:TWTR) were drawn to Chelsea in part because of the neighborhood’s proximity to the L subway line, which serves Union Square, the East Village and hip neighborhoods in Brooklyn, Hoo said.
It’s natural that Twitter Inc (NYSE:TWTR) would move to an area of the “world’s capital” as it looks to the future.