Penguin Random House has taken steps to decrease its real estate footprint at the prominent office tower, 1745 Broadway, located in Midtown. The publishing giant has engaged in recent subleasing agreements, most notably with architect firm Tagwall and real estate developer RD Management.

Details of the Subleases

The publisher currently occupies approximately 604,000 square feet within the 52-story building, owned by Invesco Real Estate (IVZ). It has already offloaded 27,375 square feet to law firm Knobbe Martens, as previous reports noted.

In the latest developments, Tagwall has secured a sublease of 26,366 square feet, encompassing the entire eighth floor, while RD Management has taken part of the seventh floor with a 17,363-square-foot sublease.

Relocations and Company Strategies

Whether these agreements signify relocations or expansions for Tagwall and RD Management is yet to be clarified. Currently, Tagwall operates out of 321 West 44th Street, while RD Management’s offices are located at 810 Seventh Avenue.

These transactions add to a series of subleases by Penguin Random House at 1745 Broadway, which is located between West 55th and West 56th streets, including the deals with Knobbe Martens, as well as consulting firm Procurement Advisors, which took 15,052 square feet, and the Make-A-Wish Foundation, which now occupies 12,373 square feet.

Business Implications and Future Plans

In total, Penguin Random House has managed to sublease nearly 100,000 square feet at this location. Richard Bernstein of Cushman & Wakefield (C&W) stated, “We have successfully subleased over one-third of the space we are marketing at 1745 Broadway in just one year. This achievement underscores the building’s appeal and the strong demand for high-quality office space in this prime Midtown location.”

Both new subleases hold terms extending until June 2033, though rental prices have not been disclosed. A report from Colliers indicated that average office rents in Midtown hovered around $79 per square foot as of February.

Market Context and Company Background

The recent subleasing strategy appears part of a broader consolidation plan for Penguin Random House. In 2019, the publisher centralized its operations by closing its SoHo offices at 345 and 375 Hudson Street, moving approximately 2,400 employees to the Random House Tower.

Challenges have surfaced for the publishing powerhouse in recent years, particularly marked by a $200 million loss due to a failed acquisition of Simon & Schuster last year, according to reports from the New York Times.