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Morgan Stanley Bails, Lehman Brothers Buys

NEW YORK CITY-Reports that Morgan Stanley plans to sell its new Midtown building before the paint dries were confirmed yesterday. Lehman Brothers will buy the 32-story building, which cost roughly $400 million to build.

By Glen Thompson | Updated on September 04, 2002

NEW YORK CITY-The city’s real estate and financial communities were abuzz late last week with reports that Morgan Stanley was negotiating the sale of its new building at Broadway and 49th Street to securities rival Lehman Brothers Holdings Inc. The two firms made it official yesterday, announcing that Lehman will purchase the one-million-sf tower.

Located a stone’s throw from Morgan Stanley’s 1.4-million-sf Times Square headquarters at 1585 Broadway, the new building, 745 Seventh Ave., has been under construction since 1999 and is scheduled for occupancy later this year. The firm recently leased Manhattan office space on Third Avenue and Morgan Stanley states it will continue to accumulate additional space at 750 Seventh Ave., 1633 Broadway, Pierrepont Plaza in Brooklyn and in retail branches throughout the city, It is reportedly planning to move some of its operations to the Westchester, Connecticut or New Jersey. Morgan Stanley did not return calls for comment.

While it is the only major financial firm to unload a major piece of real estate since the World Trade Center attacks, Morgan Stanley is downplaying speculation that the sale represents a defection from Manhattan’s cheek-by-jowl financial community. “Our agreement is in the spirit of Wall Street’s commitment to work together in the wake of the tragic events of September 11,” Morgan Stanley Chairman and CEO Philip J. Purcell states. “Morgan Stanley will continue to have a major presence in New York City and will be better positioned from a business continuity standpoint.” Morgan Stanley was the trade center’s largest tenant with roughly 3,500 staff occupying 25 floors of the complex.

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