Google May Have Paid Nike to Leave its Chelsea Building

The national athletic brand will take over the entire office portion of a new mixed-use development being built by the Durst Organization at 855 Sixth Ave.

By Daniel Geiger

Nike is moving its New York City headquarters from the epicenter of midtown south to the Penn Station area, an emerging neighborhood for companies seeking office space.

The Beaverton, Ore.-based athletic-wear company has leased 147,000 square feet at 855 Sixth Ave., between West 30th and West 31st streets. It will take the entire office portion of the 42-story mixed-use tower, which will have residential space above and ground-floor retail. The Durst Organization is constructing the 570,000-square-foot building. The property will be ready for occupancy in early 2016.

Nike will relocate to its new office from 111 Eighth Ave., a Chelsea building owned and largely occupied by Google. In recent years, Google has made an effort to clear office tenants from that property by offering to buy them out of their leases in order to allow itself to expand there. Recently, Google offered such a deal to WebMD, which is moving to 395 Hudson St. It wasn’t immediately clear if Nike received such a buyout offer to move.

Nike will occupy floors three through six at 855 Sixth Ave. and a portion of the building's second floor. The asking rent for the space was $78 per square foot. The lease is for 11 years. The space will feature sought-after amenities that have prompted demand for newly constructed space in recent years, such as high ceilings and additional perks. The sixth floor in the property has double-height ceilings and a 15,000-square-foot outdoor roof deck exclusively for Nike’s use.

The Sixth Avenue building sits at the juncture between the hip neighborhood north of Madison Square Park, known as NoMad, and the Penn Station area. Increasingly the area near the transit hub, which has generally been viewed as a second-tier office district, is being seen as one that will become increasingly popular among tenants. Vornado, the largest landlord in that district, has announced it wants to invest hundreds of millions of dollars of upgrades to the retail and public space it owns in the area and reposition it as a higher-end office desitnation.

Earlier this month, online marketer Yodle moved into Vornado's 330 W. 34th St. Nike's move to 855 Sixth Ave. bolsters the expectation that creative as well as big name tenants from midtown south can be lured to the area.