For more on the financial crisis, check out GlobeSt.com's Webinar , "Wall Street In a Freefall—The Winners and Losers."
SEATTLE-JPMorgan Chase is busy mulling its acquisition of Washington Mutual and how it will integrate the thrift into its Chase brand. The beneficiary of the nation's largest bank failure says it's too early to know what exactly the deal means for WaMu's branches or its office space, such as its new headquarters tower.
JP Morgan said in a recent conference call that less than 10% of the combined branch network would be shuttered. Given Chase has about 3,200 branches and WaMu approximately 2,200, 10% would be 540 branches. The branch closures are expected to occur in markets where Chase and WaMu retail locations overlap, which is generally not the West Coast, where Chase had little presence heretofore. The overlap is generally located in Houston, Dallas, Phoenix, Denver, Salt Lake City and the New York area.
A more significant contraction is expected to occur on the administration side, where there is ample duplication because both companies are in the same business and based in the same country. This is the contraction that is likely to affect the West Coast because WaMu's headquarters are in Seattle while its credit card and commercial banking operations are based in California. JP Morgan spokesperson Tom Kelly told GlobeSt.com this week it is "way too early" for the company to provide any detail on how the integration will affect its commercial real estate holdings.
WaMu occupies more space than any other company in Downtown Seattle. It owns the 42-story, 900,000-sf WaMu Center at Second Avenue and Union Street, which was completed two years ago and likely will take on the Chase brand, and leases an additional 700,000 sf in nearby buildings, including its former headquarters at 1201 Third Ave. and also 1415 Second Ave. and 1111 Third Ave.
WaMu's footprint in the Bay Area is approximately 497,000 sf. It occupies approximately 160,000 sf of space in San Francisco, 267,000 sf in Pleasanton, which is 40 miles east of San Francisco, and an additional 70,000 sf elsewhere in the East Bay. Its Pleasanton operations are at 4900-5040 Johnson Drive. Its square footage in San Francisco includes 92,180 sf at 123 Mission St. and 71,355 sf at 201 Mission.
Chase's West Coast headquarters are located at 560 Mission St. in San Francisco. Chase currently subleases much of the space but could consolidate operations in the building as leases expire, according to local industry sources. WaMu also is actively subleasing most of its leased space. Of its 700,000 sf of leased space in Downtown Seattle, WaMu has subleased approximately 190,000 sf and is marketing an additional 350,000 sf, most of it in 1111 Third Ave, Oscar Oliveira, a Seattle-based senior vice president with Colliers International tells GlobeSt.com.
"What we're hearing is that JP Morgan Chase will have some type of substantial presence here," he said. The question is how it will compare to what WaMu had established in the market, and to that he had the same response as JP Morgan. "It's way too early to tell," he said.
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