Published On: Sun, Jan 19th, 2014

Brian Robert’s Comcast Corp Developing $1.2 Billion New Head Office Building In Philadelphia

Last week we learned that The Related Companies is building a fabulous new headquarters in New York for cable company Time Warner. It will be located at the former Hudson Yards in Manhattan at “The Far West Side” – as Related’s huge new development there will actually officially be known. Jewish Business News reported on their plans to move there .

Not to be outdone, rival cable company Comcast Corp has announced new building plans of its own as well, in its home town of Philadelphia.

Just six years after moving into the current Comcast Center in downtown Philadelphia, the nation’s largest cable company is teaming up again with real estate investment trust Liberty Property Trust. This time they will build a second completely new skyscraper in downtown Philadelphia, at an estimated total cost of US$1.2 billion including US$300 million of, tenant funded, interior finishings.

 

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               Comcast Innovation and Technology Center – rendering courtesy Comcast Corp                  Brian Roberts

With a planned height of 1, 121 feet the new building will be the tallest building in the United State outside of New York and Chicago. Moreover it will actually be just 106 feet shorter than Time Warner’s own new digs, but in this case Comcast will be the majority owner of the building at least, and not just a tenant. Also, one suspects, a taller final antenna mast might even be added at a later stage to the top of the Comcast design, in order to keep cable industry bragging rights; yes these are grown men but it does happen.

With 59 storeys the new Comcast building will have a total of 1.5 million square feet of space, so today’s going rate for new construction is about US$800 per square foot, all in, everything; hard costs, soft costs, interior build-out – wow! Comcast will own 80% of the joint venture that will develop the property and Liberty 20% and Liberty will manage the project and the property. Liberty also owns 20% of the existing Comcast headquarters building as well, with German banking group Commerzbank owning the other 80%.

Comcast has already committed to lease about 950, 000 square feet of space, or three quarters of the new office space itself, for their headquarters and will decide by September of next year whether to occupy it all, or put some of it up for outside tenancies. Broadcasting studios of Comcast subsidiaries NBC-10, and Spanish-language TV station Telemundo, will eventually both move to the new building as well.

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Comcast Innovation and Technology Center – rendering courtesy Comcast Corp

Four Seasons Hotels is taking the top 14 floors of the new building for a 220 room hotel. This is actually about half the size of its existing Philadelphia hotel property, which will then change to another hotel chain’s brand after the move is made.

The new building is just one block from Comcast’s existing headquarters, in a key location the city has been very keen to see developed to further secure its downtown urban renewal goals. State and city grants for the project will come to about US$40 million. Liberty had bought the 1.5 acre piece of land in 2011 reportedly also for US$40 million. Award winning master British architect Norman Foster has designed the new building, which will have its elevator core displaced completely to one side to give unobstructed open floor plates.

Comcast are calling the new building the Comcast Innovation and Technology Center, partly to deliberately emphasize their own ambitions to broaden their own corporate culture beyond just being the “cable guys”.

“This is yet another historic moment for Comcast, ” said Brian L. Roberts, Chairman and CEO of Comcast. “We continue to be proud to call Philadelphia our home, and are thrilled to build a world-class media, technology and innovation center right in the heart of the City, to bring NBC 10 and Telemundo 62 downtown, and to create thousands of jobs and further drive economic activity in the region. We have assembled an incredible design and development team to expand our vertical campus, and I am more excited than ever about the future of Comcast in Philadelphia.”

He then added, “This will not be a twin, ” referring to the existing Comcast Center. “We wanted to create an environment that’s better than anywhere else. We are a different company than we were a few years ago. We are competing for talent all over the world, and we have to offer something special.”

Comcast are undoubtedly proud to be developing such a fine building and to be making a significant contribution to the development of downtown Philadelphia as well.

Of course it also comes at an opportune moment for Comcast to spread some goodwill in the more general sense as well, given the possibility of their intervention at some point into the ongoing M&A battle being waged by Charter Communications to swallow up Timer Warner Cable. They have currently put a current hostile bid worth some US$37.4 billion on the table that Time Warner has so far rejected out of hand both because it is too cheap and because it depends on a lot of financial leverage coming from such a relatively small bidder.

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Comcast Innovation and Technology Center – rendering courtesy Comcast Corp

The Time Warner CEO Rob Marcus has reportedly indicated in the past Time Warner might well prefer the “softer, gentler” touch of Brian Roberts and the giant Comcast group to the rough and tumble world of former “Cable King” John Malone, who recently bought 27% of Charter through his company Liberty Media to get back into the cable game after many years on sabbatical.

However in that eventuality Comcast might, and indeed probably ought, to face a lot of regulatory scrutiny as it would put so much of the American cable industry under one roof – currently Comcast is the largest, and Time Warner the second largest, cable company in the nation.

A three way split, with each of Comcast, Time Warner and Charter sharing certain markets could well be something the government could live with though, if that is how it should play out.

In some ways it is ironic that both Comcast and Time Warner Cable should be unveiling their new long range space plans, with two such beautiful new buildings, at the same time as a takeover storm could be developing just over the horizon. And if at the end of the day the two companies were indeed to merge, would they need both towers beautiful or not?

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