HBO to stay in Manhattan.

Tishman Real Estate Services Company, Inc. (TRESCO), serving as strategic real estate advisor to Home Box Office (HBO), a division of Time Warner Entertainment Company, L.P., has negotiated new leases at 1100 and 1114 Avenue of the Americas which will keep the entertainment company's world headquarters in its current Manhattan offices for at least another 20 years, and possibly seven more if HBO elects to exercise lease extension options.

Time Warner entered into a 20-year lease extension for HBO's 350,000 square feet at 1100 Avenue of the Americas, where it has been headquartered since 1984. Simultaneously, HBO also extended its lease for about 243,000 square feet at the adjacent building at 1114 Avenue of the Americas. The lease at the 1100 building runs to december 31, 2018 and allows HBO the option to extend for an additional seven years. The value of the net lease, exclusive of operating costs, is approximately $250 million.

"Realizing it was facing a rising real estate market with separate leases due to expire in 2004 and 2006 at two adjacent Class A buildings with different landlords, HBO requested our advice in reviewing all future options for both its headquarters location and operations," said Joseph J. Simone, president of TRESCO. "The most comprehensive way to offer real estate counseling relating to headquarters analysis and site/tenant usage is to become part of the fiber of our client corporation. So, in the case of HBO, TRESCO met weekly over the course of 19 months with key executives from various sectors of the company, effectively merging the TRESCO and HBO teams to create a real estate 'think tank.'"

"My team and I presented 10 solid options to HBO, from moving the headquarters to New Jersey to leasing land and building a new headquarters operation in Times square," Simone continued. "Ultimately, however, it became clear that HBO felt strongly about its current location on Sixth Avenue (also known as 'Corporate Row') at the foot of Times square, the crossroads of the corporate and entertainment worlds. That location also allows for proximity to Bryant Park, where HBO has hosted a summer film series for the last several years. Another great benefit of the 1100 and 1114 buildings is that they have a connecting floorplate which allows HBO employees to move easily between the many departments of the organization."

In the fall of 1998, TRESCO began negotiations with 1100 Avenue of the Americas Associates (landlords at the building known as the HBO Building because the company fully occupies its office space) and Trizec-Hahn Corporation (owners of the 1114 building, which is known as the Grace Building), that focused on making both facilities more effective and operationally efficient for HBO.

The owners of 1100 Avenue of the Americas were represented by Cushman & Wakefield's Bruce Mosler, executive vice president, Tara Stacom, executive director, and Matthew Astrachan.

"This is tremendous news for New York City," Mosler said. "Not only are we keeping an international media company at 1100 Avenue of the Americas for years to come, but HBO continues to add to the revitalization of Times square. The deal was a win-win transaction for the ownership, the tenant and the City itself."

In total, Simone says, negotiations lasted eight months and resulted in both the owners' cooperation in performing upgrades and providing HBO with greater input concerning building operations. In addition, at the Grace Building, HBO will receive additional space which will become available in 2002.

The total square footage of the deal is just under 625,000, with HBO taking 349,205 square feet at the 1100 building and 275,605 square feet at the 1114 building.

"We're delighted with the service that Joe Simone and his colleagues at TRESCO provided for us. The research and analysis of our various options was quick, thorough and astute," said Michael Moorin, vice president of real estate at HBO. "The dealings with each of our landlords went well and resulted in transactions that are advantageous to our business. We've locked in our rental costs for the next 20 years and avoided major relocation expenses - plus we'll be operating out of improved buildings that are ideally located for both our operations and employees, allowing us to stay competitive well into the new millennium."