Nowhere in the world is more associated with the New Year’s Eve celebration than Times Square. Every year (barring wars and pandemics) tens of thousands of people pack the 11,600 square foot plaza where Broadway and 7th Avenue intersect in Manhattan and another billion tune in on television to watch the “ball drop.” The giant lit orb that descends a flagpole during the last ten seconds of the year has come to be known as the official mascot for the celebration. Lesser known, but still equally important to the pageantry, is the building that it sits on top of.
In 1903 a new office building was financed by a German-born Jewish immigrant named Adolf Ochs to house his growing newspaper publication The New York Times. The building, the second highest in the city at the time, was awkwardly shaped due to its thin parcel between the converging streets of Broadway and 7th Avenue. Nevertheless, Ochs was so excited about the opening of his company’s new headquarters that he paid for a lengthy fireworks display shot from the roof of the building at midnight on December 31st. As much as Ochs loved his building, he was more enamored with the surrounding area. Sitting on top of a subway stop and adjacent to a small plaza for people to congregate, Ochs wanted to make the area a known destination in the already bustling metro. And the best way to do that was to give it an official name. So, after lobbying with the city the newspaperman was able to get the area named Times Square—even though it isn’t square at all.
So for the next four years The New York Times continued its fireworks display for a New Year celebration until Mr. Ochs decided that it was not enough. So, to try to bring more attention he hired an electrician to create a ball of lightbulbs that would descend the flagpole on top of the structure. Remember that at the time lightbulbs were rare and electricity was expensive, a Christmas tree light display cost around $2,000 in today’s money to power, so light displays were quite the draw. This 700 pound, 5-foot ball of 100 lights wowed onlookers and set in motion a tradition that lives on today. Granted, the ball has changed a lot since its first inception, the current one is twelve feet in diameter and weighs almost six tons. But the idea of counting down while the ball descends has been around long enough to become a part of our collective human experience.
The New York Times moved headquarters to another building in 1913 and since then the building has struggled to attract office tenants. The building’s small windows and cramped floor plates did not serve it well as time went on and the office market changed. Currently the only tenant is a Walgreens on the ground floor. But, while the investment that Adolf Ochs made in the building might not have stood the test of time, his investment in the area is enough to save it. The building became famous for its “zipper,” an electronic ticker style billboard installed in 1926 that would scroll important breaking news (and later stock quotes).
Incredibly, it wasn’t until 1996, when the now-infamous Lehman Brothers bought the building, did the commercial value of its advertising space get extracted. They bought the building at a discount, $27.5 million, but decided that the renovation needed to bring in a modern office tenant didn’t pencil out considering the relatively small amount of leasable space. Instead, they decided to install a grid of large digital billboards twenty five stories high on the prominent narrow end of the building and market the ad space to some of the biggest companies in the world. The building had iconic ads by companies like Coca-Cola and Sony and was used by the Tonight Show. Eventually, the billboards became as well known as the ball that sits on top, waiting for its yearly performance.
Not long after these giant TV screens were installed to display advertising, a race was started between all of the building owners in the area to put as much digital advertisement as physically and legally possible. Now Times Square billboards are some of the most expensive in the world. Since the area boasts 1.5 million visitors daily, an ad on a billboard in the area can run as much as $3 million per month.
It is for this reason that One Times Square, the building that started it all, is able to be profitable without any of the office workers that it was originally designed for. If you look at the building on its own it might seem like a colossal failure of design but it has been able to rely on the neighborhood that it helped popularize. Now it is owned by Jamestown LP, an asset management company that invests for many German pension funds and is known for their patient approach to real estate investment. It sounds like the perfect owner for this highly irregular piece of commercial real estate that is worth more for the images on its facade than the space inside of it.