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Round-the-Clock Negotiation

The sun was coming up outside the windows of the midtown conference room.
Time was running out on one of the largest and most high-profile commercial lease negotiations in Manhattan.

The deal: A massive and complicated 1.2 million-square-foot lease extension and expansion at 1211 Avenue of the Americas.

The inauspicious deadline to close: Friday, January 13.

Late-in-the-day requests by tenant companies 21st Century Fox and News Corp on Thursday had kept the parties working well into the night, sending them back to the negotiating table at 3 a.m. on Friday. The Loeb & Loeb team, acting on behalf of landlords Ivanhoé Cambridge and Callahan Capital Properties, was still working to reach a deal that would keep our clients’ biggest tenants in place, while expanding their occupancy to nearly 60 percent of the midtown skyscraper and extending their leases into the future.

The prior year, Fox and News Corp publicly announced that they had negotiated terms for a move of their joint headquarters to the yet-to-be-built 2 World Trade Center in Lower Manhattan.

Six months later, the media giants reversed the decision, setting the clock ticking on lease negotiations with our clients.

From the outset, the complex deal was made even more challenging by complicated corporate structure issues, convoluted lease documents, extraordinary time pressure and the ever-present possibility that the two companies would change their minds again and make a move downtown.

The biggest challenge?

The original lease was from 1992 — before Fox and News Corp split into separate businesses — and it had been amended 24 times.

Our team was not only tasked with negotiating the 25th amendment, but also had to create a new stand-alone lease document for News Corp, giving the company similar rights and privileges as Fox. This required the painstaking process of unwinding the effects of each of the previous 24 amendments — some of which added specific clauses or provisions that were revised or removed by an amendment down the line. The lease bifurcation was further complicated by the delicate interplay of the tenants’ options and branding rights and restrictions, many of which could be granted to only one of the two companies. 

After navigating this intricate web of lease amendments and letter agreements while negotiating infrastructure changes and flexible options for all parties, we had final signatures just before sundown on Friday, the 13th of January.