Morgan Stanley Exploring Move to Manhattan's West Side -- Update
February 09 2017 - 8:40PM
Dow Jones News
By Keiko Morris and Liz Hoffman
Morgan Stanley is exploring a move to Hudson Yards, the vast
development going up on Manhattan's West Side, according to people
familiar with the matter.
The bank is considering the purchase of the remaining 2 million
square feet at 50 Hudson Yards, the planned tower where money
manager BlackRock Inc. is also expected to move its headquarters,
the people said, cautioning that the talks were early-stage.
"We routinely review potential options for upgrading our
workspaces," a spokeswoman for the bank said. "As we consider plans
to continue to upgrade our current office space, we are also in the
very early stages of evaluating potential alternatives. We
anticipate a lengthy timeline before any decisions are made."
The 2.9 million square foot tower at 50 Hudson Yards is part of
a massive mixed-use development under construction by Related Cos.
and Oxford Properties Group.
Morgan Stanley owns its current headquarters at 1585 Broadway, a
1.3 million square foot skyscraper in Times Square. It also owns
about 570,000 square feet in a Fifth Avenue building that houses
its asset-management business, and a complex in Purchase, N.Y.,
that houses its retail-brokerage business.
The 2 million square feet it is eyeing at Hudson Yards is more
than its combined footprint in New York City. Should it move, it
isn't clear whether it would sublease or sell its current
skyscraper, which New York City brokers have said could fetch more
than $1 billion.
The Hudson Yards development has lured some of the biggest names
in financial services, including BlackRock and private-equity firm
KKR & Co. Wells Fargo & Co. is moving its New York
securities business there.
BlackRock, the world's largest money manager, has entered into a
letter of intent to lease 850,000 square feet across 15 floors. The
building is designed for multiple tenants with distinct
entrances.
Like many of its peers, Morgan Stanley started out on Wall
Street itself, in an era when proximity to the downtown stock
exchange was key. But like others, it moved to Midtown Manhattan,
eventually buying 1585 Broadway for about $180 million in 1993,
after the building's original developer went bankrupt.
It has recently been renovating floor-by-floor, many of which
haven't been updated since the 1990s. The windows on the lower
floors are flooded with garish neon from Times Square
billboards.
Big banks tend to own their headquarters, bucking a trend among
many U.S. companies to be more asset-light and free up cash trapped
in real estate. In part, that is because of the architectural
demands of their trading businesses, which require precise layouts
and hookups to clients, data centers and clearinghouses.
J.P. Morgan Chase & Co. owns 270 Park Avenue, its global
headquarters, and Goldman Sachs Group Inc. spent $2 billion to
build the glass-walled, airy skyscraper at 200 West Street, which
opened in 2010. Citigroup Inc. recently bought its Tribeca
headquarters from its landlord.
Morgan Stanley had once planned a Times Square "campus," and
developed a tower on Seventh Avenue, across the street from its
Broadway base. But after the Sept. 11 terrorist attacks, the firm
backed away from the plan, wary of putting too much of its head
count and infrastructure in the same space.
It sold that building to Lehman Brothers, which had lost its own
headquarters in the attacks. It is now the U.S. home of Barclays
PLC.
Write to Keiko Morris at Keiko.Morris@wsj.com and Liz Hoffman at
liz.hoffman@wsj.com
(END) Dow Jones Newswires
February 09, 2017 20:25 ET (01:25 GMT)
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