Discovery Communications is moving its headquarters from Silver Spring to New York City by 2019.
The relocation is dependent on the Discovery’s acquisition of Scripps Network Interactive. A national operations headquarters will also be opened at Scripps’ Nashville, Tennessee, campus.
“The media industry is rapidly evolving, increasingly global, more consumer focused and more multi-platform and Discovery must evolve with it,” David Zaslav, Discovery’s president and CEO, said in a statement.
“The decision to move our global headquarters from its founding home is one we do not make lightly. We remain unwavering in our support of the Maryland and Greater Washington, DC area and we thank the leadership of the State of Maryland, Montgomery County and, most importantly, our employees for their cooperation and understanding as we make this important next step for the long-term success of Discovery.”
Discovery intends to compete a network hub in Maryland that will house certain network, support and government relations functions. The company, which currently employs 1,300 people in Maryland, will not make decisions regarding job status and relocation decision until after the Scripps deal closes. The company announced in July it had reached a deal to purchase Scripps for $14.6 billion.
The company was founded in Landover in 1985, moved its headquarters to Bethesda in 1991 and relocated its headquarters to Silver Spring in 2003. The closure and sale of the headquarters property at 1 Discovery Place is expected a year after the Scripps acquisition is approved.
Discovery operates 13 U.S. cable and satellite television networks, including Discovery Channel, TLC and Animal Planet. In 2016, the last full year for which results are available, the company reported $1.19 billion in profit on $6.5 billion of revenue.
In September the Maryland Department of Commerce announced it was providing a $625,000 conditional loan to Discovery as part of a planned $10 million overhaul of the headquarters. Montgomery County was also set to assist providing a $375,000 loan via its Economic Development Fund. But those funds were never dispersed to Discovery, according to the state.
“Throughout the process, Gov. Hogan had multiple conversations with Discovery CEO David Zaslav and Commerce worked closely with the Discovery team. While disappointing, the news that the state was able to secure a commitment to create a network hub and retain hundreds of employees in Maryland is welcome,” Allison Skipper Mayer, a spokeswoman for the Maryland Department of Commerce, said in an emailed statement.
Discovery’s move from Silver Spring will represent a blow to Maryland’s D.C. suburban office markets vacancy rate. The market, after a prolonged slump caused in large part by slashed federal spending, had a robust rebound in 2017. Last year the market absorbed more than 500,000 square feet of space, which is suburban Maryland’s best showing in five years.
But 1 Discovery Place, a 10-story tower with an aluminum and glass facade completed in 2003, could draw significant investment interest once it’s officially on the market.
The Silver Spring submarket, with an 11.9 percent direct vacancy rate, isn’t as hot as the Bethesda submarket, which posted an 8.7 percent direct vacancy rate in the fourth quarter of last year. But the Washington area is expected to continue to draw significant interest from investors. The Association of Foreign Investors in Real Estate’s 2018 Investment Survey ranked D.C. as one of the nation’s top five markets for foreign investment.