Music streaming giant Spotify is set to sublease 103,000 square feet of its office space at 4 World Trade Center to ticketing platform StubHub.
That’s according to reports from the New York Post and Commercial Observer this week. The reported move comes as Spotify reevaluates its office footprint amid layoffs, cost-cutting measures and a shift towards remote work.
Spotify, which originally occupied 564,000 square feet at the 72-story tower developed by Silverstein Properties, has been gradually reducing its office space. Prior to this reported deal, Spotify had already subleased significant portions of its space to companies like payroll management firm Rippling and language-learning platform Duolingo.
In January, the streaming platform subleased a 69,000 square-feet space on the 59th and 60th floors of the 4 World Trade Center to Rippling, and an 85,666 square-feet space to Duolingo in December 2023.
StubHub, on the other hand, is expanding its presence in New York. Previously occupying 44,000 square feet at 3 World Trade Center, StubHub’s new agreement allows it to more than double its space, according to the reports. Commercial Observer noted that after StubHub’s March 2023 deal for the 59th floor of 4 WTC, the company will now more than triple its WTC footprint to 147,000 square feet.
The reported move comes as StubHub prepares to go public. Less than a month ago, the Wall Street Journal reported that StubHub’s long-awaited $16.5 billion IPO has been delayed due to “choppy market conditions.”
“Structuring a deal that meets StubHub’s needs is a testament to the collaborative effort between all parties involved in this transaction,” Savills’ Scott Bogetti, who arranged the deal for StubHub, was quoted by Commercial Observer as saying.
Savills did not disclose the terms of the deal, but Commercial Observer previously noted that office space on the 59th and 60th floors of 4 WTC was subleased for $62 per square foot earlier this year. Meanwhile, the New York Post reported that direct rents for the remaining space available in the building are in the $90s per square foot.
Silverstein leasing director Jeremy Moss told the New York Post that “when sublease space becomes available at the World Trade Center, it gets taken very quickly.”
For Spotify, the move to sublease additional office space is a strategic move to optimize its real estate portfolio amid changing business dynamics. The company laid off a total of 2,300 employees over three rounds of job cuts in 2023.
In December 2023, Spotify co-founder and CEO Daniel Ek said: “Considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team.”
Spotify’s cost-cutting efforts have paid off, as evident in its most recent quarterly financial report. The company reported a significant reduction in operational costs, resulting in its biggest-ever quarterly profit in the second quarter.
The company added 7 million paying subscribers in Q2, 1 million ahead of its guidance, to end the quarter with 246 million paying subs. Spotify reported “record high” operating income of €266 million (USD $290.8 million) in Q2, marking its second consecutive quarterly profit.
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