Spotify wants to sublet five floors of its offices at 4 World Trade Center in Manhattan and plans to vacate them by the end of the year.
Spotify plans to vacate five floors of its four World Trade Center offices by the end of the year and is looking to sublet them. The streaming giant is among the largest tenants in the building, where it has 564,000 square feet — 14 floors — of offices.
The area to be unloaded includes more than 85,666 square feet, which the company acquired from the Port Authority of New York and New Jersey in 2018 when Spotify expanded its footprint.
“Our focus has shifted more to optimizing our current portfolio and reviewing our real estate needs around the world, rather than significantly expanding our footprint in current markets,” Spotify CEO Daniel Ek said in a recent conference call to the results and explained that the company will be making a reduction in its real estate costs as more employees choose to work remotely.
Spotify’s plans have dealt another major blow to the Manhattan office market since the pandemic, as vacancy rates hit a record high this year. Big tech firms like Meta and Twitter, which fueled demand for offices, have shed staff and reduced their need for real estate.
But Spotify has yet to find prospects who can sublet it long-term agreement The leases made when the streaming company moved in have given them the space until at least 2034. The deal the company signed in 2017 called for extensive customization on each of its 14 floors, bringing the rent alone to $33.29 million annually, or $2.77 million per month.
With streaming still the dominant form of music consumption, it’s hard to imagine that Spotify’s cuts would indicate significant trouble. The platform continues to thrive among its competitors, and more and more artists are coming onto the platform 1 billion Spotify streams Milestone – a level of commitment that even apple music can’t touch.