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NEW YORK CITY-In what tenants and building owners alike may regard as a highly improbable scenario in the New York City real estate community, a Midtown tech firm has received a full and unconditional release from its long-term, 82,000-sf lease.

LivePerson Inc. is an Internet software company that provides corporate instant-messaging systems. Located at 330 W. 34th St., the firm had nine years left on it’s 10-year lease. A $2-million build out had just been completed when a series of fundamental changes to its business model made the two-floor space impractical and needlessly expensive, LivePerson president Tim Bixby tells GlobeSt.com. “We’ve been looking for a subtenant and negotiating with the building owner for about nine months,” Bixby says.

Unlike thousands of Web-based businesses, however, LivePerson’s quest for smaller quarters was based not on lack of cash but on a corporate reorganization that moved much of its workforce either out of the country or into cyberspace. “We reduced our direct sales force in favor of an on-line sales staff that can work from any location,” Bixby says. “We also moved a lot of our operation to Israel.”

That decision was based on LivePerson’s recent acquisition of Tel Aviv-based technology firm HumanClick, which eliminates the need for local tech support. All of the New York firm’s research and development as well as programming work is now done in Israel. The overall redeployment of staff reduced LivePerson’s local workforce from 95 to 50.

Bixby went back to building owner Vornado with a subtenant ready to occupy the space and, finally, the lease was torn up. “The interesting thing about the deal is that we were able to share the space. So, we were could look for new space and the tenant was able to get in immediately.”

With his local staff slashed by nearly half, Bixby says he is looking at spaces under 10,000 sf and negotiating several leases in buildings south of Midtown and priced at less than $30 per sf.

While Bixby would not disclose the terms of the 34th Street lease, he expects his monthly rent to decrease by roughly $240,000 or $24 million over the what would have been the life of the now-defunct Midtown lease.

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