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Morgan Stanley Closes in on Leaseback on 725,000-SF Chevron/Texaco HQ

WHITE PLAINS, NY-Morgan Stanley is in final negotiations to acquire the Chevron/Texaco headquarters property in nearby Harrison. The plan then is to turn title over to the Westchester Industrial Development Agency and walk away from the table with a straight lease, saving some $8.4 million in sales taxes.

By John Jordan | Updated on March 07, 2002

WHITE PLAINS, NY-Morgan Stanley is in final negotiations on the purchase of the 725,000-sf Chevron/Texaco headquarters in nearby Harrison. GlobeSt.com has learned that the firm received preliminary approval today to structure a straight lease transaction on the property after it turns title over to the Westchester County Industrial Development Agency. The deal, if finalized, would save the New York City-based financial-services firm approximately $8.4 million in sales taxes.

Morgan Stanley is set to pay $42 million for the 107-acre site, according to papers filed with the Westchester County Industrial Development Agency. The financial services firm plans to use the building, at 2000 Westchester Ave., as a data center and backup trading facility and will house as many as 2,000 employees there. However, the company plans to undertake a major capital improvement project before taking occupancy. After improvements are done, the total bill should total $227 million, which includes acquisition and construction costs as well as the purchase of equipment and other ancillary expenses.

The Chevron/Texaco deal was not driven by a program to replace space lost at the World Trade Center, sources close to the deal say. The company stresses that the WTC space has essentially been replaced and that the Harrison property is part of the firm’s plan to “decentralize office locations for security and business continuity purposes” after the terrorist attacks of Sept. 11.

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