NEW YORK CITY—Bank of New York Mellon Corp. is mulling two different locations for a move from its Downtown headquarters, according to Bloomberg. The financial firm is deciding between a lower Manhattan skyscraper and a smaller office building in New Jersey for at least 850 employees who would relocate—and need to lease 400,000 square feet of space—following a sale of BNY's building at One Wall St.
One of the bank's top candidates is 225 Liberty St., a 2.7 million-square-foot tower at Brookfield that was once mostly leased to Merrill Lynch & Co., reports a person with knowledge of the negotiations. The other front-runner is a 410,000-square-foot waterfront building at 70 Hudson St. in Jersey City, the person said. Alternatives haven't been ruled out. The governments of New York and New Jersey are said to be putting together packages of benefits designed to sway BNY Mellon's decision for a move.
“They're playing the New Jersey thing off of New York right now, trying to get some reasonable level of incentives,” says Peter Hennessy, president of the New York tri-state region for brokerage Cassidy Turley—which isn't involved in the lease discussions—to Bloomberg. “It's important for New York to retain the stature of downtown as one of the key financial markets in the world.”
BNY Mellon also reportedly is closing in on selecting a buyer for 1 Wall St., a 52-story limestone tower near Broadway that may bring in one of the highest per-square-foot prices for a large lower Manhattan office building. Bids for the one million-square-foot skyscraper may come in as high as $600 million, or about $600 a square foot, a price largely driven by the potential for the floors above its base to be converted to residential condominiums, according to the person close to BNY's sale and leasing effort.
The company is “exploring the sale of 1 Wall St. and examining potential properties to lease in New York and New Jersey,” says Kevin Heine, a BNY Mellon spokesman. “That process continues and no decisions have been made.” The bank expects to settle on its plans by the end of the second quarter or the beginning of the third.
A spokeswoman for Brookfield Office Properties, which owns the eight million-square-foot Brookfield Place, declined GlobeSt.com's request for comment. A little less than two million square feet of former Merrill Lynch space in the complex remains unleased.
The 44-story Liberty Street tower, located on the Hudson riverfront, emerged as a favorite after BNY Mellon also considered space in new skyscrapers at the World Trade Center site, according to the person with knowledge of the discussions.
The bank plans to split the 1,700 employees who work at 1 Wall St. between the new building and its offices at 101 Barclay St. nearby, with most going to the new site, the person said.
Moving to Jersey City, one stop from Manhattan on the PATH train, would be a less costly option. Class A office rents on New Jersey's Hudson waterfront averaged $38.94 a square foot at the end of March, according to data from Cushman & Wakefield Inc. In the World Trade Center submarket, which includes Brookfield Place, the average was $62.15 a square foot.
The 12-story building at 70 Hudson St. was completed in 2000 by New Jersey-based developer Hartz Mountain Industries Inc. Lehman Brothers Holdings Inc. rented the entire property after its offices at Brookfield Place, then known as the World Financial Center, were damaged in the Sept. 11, 2001, terrorist attack. Barclays Plc took over the lease after Lehman filed for bankruptcy in 2008, and its agreement expires in January 2016, according to information compiled by Bloomberg.
Barclays intends to vacate the building, the person with knowledge of the situation says. Brandon Ashcraft, a Barclays spokesman, did not respond to a GlobeSt.com request for comment by press time. The building is owned by Princeton, NJ-based Chambers Street Properties.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
