Real Estate

5 Times Square to ‘entertain’ Roku in massive deal

One week after the New Year’s Eve ball-drop, streaming television hardware pioneer Roku is set to drop on the “Crossroads of the World,” Realty Check has learned.

Roku, the manufacturer of digital media players used in tens of millions of homes, on Thursday signed a long-term lease for 240,000 square feet on the top eight floors of RXR Realty’s 5 Times Square.

“It was long thought of as the EY building, and now, Roku sets a new tech tone,” said RXR chief executive Scott Rechler. EY, previously Ernst & Young, was the tower’s original anchor tenant when it opened in 2003. Roku is expected to move in by the fourth quarter of this year.

Times Square’s showgoers will know Roku’s there. It will control the big vertical “blade” sign that long had EY’s name on it.

Rechler said that Roku’s space needs grew so fast, it actually added 100,000 square feet to its initial offer at Five Times Square in the middle of a hush-hush, six-months negotiation. 

He said that Roku bumped “other tenants who wanted their space. We’re now talking to them about other parts of the building.” Rechler was mum on rent terms but market sources said the deal was done in the $90s per square foot.

Rendering of dining area in Five Times Square
The tech company’s giant lease is one more sign that the Times Square office market still has cachet.

Roku is nearly quadrupling the 70,000 square feet it will leave behind at 414 W. 41st St. (Its headquarters remain in San Jose, Calif.) Publicly traded Roku, which recently ended a dispute with YouTube, claimed its smart-TV operating system had 56 million active accounts and a 38 percent share of new TV sets sold at the end of 2021.

The Times Square office market – given up for dead by many during the pandemic’s “ghost town” days of 2020 – is suddenly on fire.

As we reported last week, Touro College and University is establishing a 250,000 square-foot campus at the Rudin Family’s Three Times Square across West 42nd Street from RXR’s building. The Seventh Avenue corner towers were part of the turn-of-the-century quartet that defined the “new” Times Square.

The lobby of Five Times Square
Five Times Square, even with the Roku lease, has plenty of office space left to fill.

Discussions for blocks as large as Roku’s and Touro’s at marquee locations are usually reported long before deals are completed. But not a word of either leaked out in advance.

Rechler noted, “There’s not a lot of chatter” now because, in the fraught pandemic environment, “companies are being more cautious and landlords are more respectful about confidentiality.” Some normally chatty brokers have told us they’re muzzled on pain of forfeiting commissions.

Several big companies recently left Times Square  – leaving RXR, Rudin and the Durst Organization with millions of square feet of space to fill. Some 700,000 square feet remain available at Five Times Square and 500,000 at Three Times Square.

Durst lured TikTok, law firm Venable and other tenants to fully re-tenant Four Times Square, now upgraded and rebranded as One Five One.

Five Times Square,  owned by RXR and investor David Werner, is having $50 million in capital improvements. Its 39 stories contain 1.1 million square feet of office space. It boasts a new, 48,000-square-foot amenity space designed by David Rockwell with a restaurant and fitness center.

Work station
Workers at Five Times Square will have access to a gym and restaurant.

Rechler said work is underway on some of the upgrades s — including on a new subway entrance through the lobby – but not yet on EY’s floors, as “they’re still in the building until mid-year.”

RXR was repped in-house by Dan Birney and Alexandra Budd along with a CBRE team led by Bob Alexander and Ryan Alexander. CBRE’s Sacha Zarba and Frederick Fackelmayer acted for Roku.

Reps for Roku couldn’t immediately be reached.

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