Facebook boosts NYC office market

Facebook placed a huge bet on New York City and its need for office space by leasing 730,000 square feet in the massive James A. Farley Building, a stately former US Postal Service structure.

Facebook joins Apple, Amazon and Google in expanding operations in Manhattan. The deal bolster New York's reputation as a growing technology hub known as Silicon Alley, second only to California's Silicon Valley as home to major technology companies and a center of innovation.

"Facebook first joined New York's vibrant business and tech community in 2007," said Robert Cookson, Facebook's vice-president of real estate and facilities, in a statement. "The Farley Building will further anchor our New York footprint and create a dedicated hub for our tech and engineering teams."

The Farley Building, constructed in 1913, spans the area between West 31st and West 33rd streets bordered by Eighth and Ninth avenues. It's across the street from Madison Square Garden, home to the NBA's New York Knicks and the NHL's New York Rangers.

The decision is surprising in view of the current COVID-19 crisis.

The Wall Street Journal reported that less than 10 percent of workers have returned to offices in Manhattan.

In addition, Facebook has said that within a decade as many as 50 percent of its 52,200 employees nationwide are expected to work from home.

Facebook has about 4,000 employees in Manhattan, up from about 2,900 at the start of the year and may add more. This suggests offices are far from dead.

"We are delighted to welcome Facebook to the Farley Building — a property like no other in New York City," said Steven Roth, CEO of Vornado Realty, developer of the Farley Building, in a statement.

"Facebook's commitment to Farley expands our long-standing relationship and advances our vision for the Penn District, the new epicenter of Manhattan. Facebook's commitment is a further testament to New York City's extraordinary talent and reinforces New York's position as the nation's second tech hub."

Vornado's stock rose on news of the deal.

The Farley Building is the centerpiece of Vornado's redevelopment of the Penn District, once filled with dilapidated low- and midrise buildings. The area to the south and west, called Hudson Yards, has been redeveloped with high-rise offices, residential towers and high-end retail.

When renovation is complete, the Farley Building will include Facebook's office space, the Moynihan Train Hall serving rail commuters and Amtrak riders — replacing the current Penn Station — plus 120,000 square feet of retail space including restaurants and shops. Phased completion of the project is expected to begin by year-end.

Once Manhattan's main post office, it is named after James A. Farley, who served as postmaster general from 1933 to 1940. The building was designed to complement the original Pennsylvania Station, a beaux-arts gem demolished in the 1960s in what critics decry as an act of civic vandalism.

Facebook's decision to expand its presence in New York is welcome after Amazon dropped plans to add at least 25,000 jobs at a second headquarters in Queens. US Congresswoman Alexandria Ocasio-Cortez, a Democrat, led opposition to the project, citing "creeping overreach of one of the world's biggest corporations".