Fox Corp. plans to vacate a quarter of its space at 1211 Sixth Ave., a move that would come only three years after Rupert Murdoch’s media empire agreed to stay in the Midtown tower until 2042.
Fox intends in November to leave 330,000 of its 1.25 million square feet in the building, credit-rating agency KBRA said in a report Wednesday in which it downgraded 1211 Sixth’s $1 billion mortgage, citing an “impending decline in the property’s occupancy.”
The building houses the corporate headquarters for Fox and News Corp., studios for Fox News, and the Wall Street Journal and New York Post newsrooms.
It’s not clear which parts of the Murdoch enterprises would shrink their space at 1211 Sixth. Fox and News Corp. would continue to occupy about half of the 45-story, 1.9 million square-foot building, a person familiar with the matter said. About half the space to be vacated is subleased to Disney Streaming Services, KBRA said, likely a remnant of the 2019 deal in which Fox sold its entertainment assets to Disney for $71 billion. Disney, which didn’t respond to a request for comment, plans to take new space at 7 Hudson Square and relocate studios for “Good Morning America” from Times Square.
Fox referred questions to Mary Ann Tighe, CEO for the tri-state region at CBRE. She negotiated the lease extension for it and News Corp. in 2022 and said the building’s owner was aware of Fox’s plans when the parties reached their agreement.
“Nothing has changed,” Tighe said.
The decision by Murdoch’s conglomerate to extend its presence at 1211 Sixth was major news in January 2023. “If ‘work from home’ is the future trend, home will mean 1211 Sixth Avenue for Fox Corp. and News Corp for 20 more years to come,” the New York Post said at the time.
At the time the building’s owner, pension fund Caisse de dépôt et placement du Québec, announced that Fox and News Corp. had signed separate long-term leases totalling almost 1.2 million square feet. Fox’s 670,000 square-foot lease starts in December of 2025 and News Corp.’s 486,000 square foot lease would begin two years later, according to a press release from Ivanhoé Cambridge, the real estate division of CDPQ.
KBRA described the agreement differently. It said Fox and News Corp. extended their leases a combined 924,000 square of space through February 2042, and a lease for about 328,000 square of space expires in November 2025. CDPQ, which manages $330 billion in assets, didn’t reply to an email seeking comment.
A few weeks after agreeing to stay at 1211 Sixth, Murdoch scrapped plans to combine Fox and News Corp. nearly 10 years after splitting them up.
The second largest tenant at 1211 Sixth, law firm Ropes & Gray, plans to move out altogether in two years, leaving behind more than 300,000 square feet for new offices in Hudson Yards.
In January CDPQ sold a 49% stake in 1211 Sixth to Manhattan developer RXR in a transaction that valued the building at $1.2 billion, or 33% less than its previous valuation. RXR pledged to invest $300 million renovating the 52 year-old tower’s lobby, public plazas, and storefronts. Work is expected to continue until 2028. The Canadian pension fund continues to hold a 51% stake in the building.
KBRA said near-term tenant loss would cause 1211 Sixth’s occupancy rate to fall to 74% from 94%, though it expects occupancy to stabilize at 88%. A person familiar with the matter said the subleased space that will soon be vacated has already been leased.
Tenant turnover comes at a delicate time. The tower’s mortgage comes due in August and will have to be refinanced at a higher rate than the current 4.15%. KBRA said the building’s owners could find that to be “challenging.”
