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When Playboy's lease came up for renewal, executives at Hugh Hefner's classic magazine considered making a break from their posh Fifth Avenue headquarters. After a decade, the company needed more room, and the edgier surroundings of downtown and midtown south beckoned with lower rents and a hipper vibe.
But after checking out several locations, the publisher instead signed a 15-year lease to stay in its high-ceilinged digs at 730 Fifth Ave. Longtime landlord the Winter Organization sweetened the deal by offering Playboy more office space, if and when the company wants to expand.
"At the end of the day, the most logical and viable alternative for them was to renew in place with expansion in the building," says Paul Glickman, a Cushman & Wakefield Inc. executive vice president who represented Playboy in the deal.
As the New York economy shows signs of life and the commercial real estate market tightens, more companies are choosing Playboys path, renewing their leases rather than seeking out bargains elsewhere. They say that the effort of uprooting their workers and the expense of building out new space makes moving less enticing now than it was even a year ago.
Proof in numbers
Costar Group Inc. data show that 18...