Wall Street Is Moving, and It’s Reshaping New York

By Rob UrbanRob Urban, David M. LevittDavid M. Levitt and Christopher CannonChristopher Cannon

From the 86th floor of the Empire State Building, historian Ingo Walter can point to Wall Street’s past, present and future—first facing south, then north, now west.

More than three centuries after Dutch settlers built the financial center’s namesake barrier, Wall Street is more of a concept than a place. It’s been years since most big-name financial firms were housed in Manhattan’s Financial District. Deutsche Bank AG announced its departure this month. Starting in the 1970s, some migrated to Midtown. Now, many are on the move again, this time to Hudson Yards.

Moving Between Markets

Many companies are planning to leave Midtown in favor of Hudson Yards.

Moves out

Moves in (millions of sq. ft.)

Downtown

Midtown

2

M

1

0

−1

−2

3.7M

Sq. ft. in deals were made in 2014 to move out of Midtown

−3

−4

2013

2018

2013

2018

Hudson Yards

Midtown South

4

M

3

3.3M

Sq. ft. in deals were made in 2015 to move into Hudson Yards

2

1

0

−1

2013

2018

2013

2018

Moves out

Moves in (millions of square feet)

Downtown

Midtown

Hudson Yards

Midtown South

3.3M

Sq. ft. in deals were made in 2015 to move into Hudson Yards

3

M

2

1

0

−1

−2

3.7M

Sq. ft. in deals were made in 2014 to move out of Midtown

−3

−4

2013

2018

2013

2018

2013

2018

2013

2018

Moves out

Moves in (millions of square feet)

Downtown

Midtown

Hudson Yards

Midtown South

3

M

3.3M

Square feet in deals were made in 2015 to move into Hudson Yards

2

1

0

–1

–2

3.7M

Square feet in deals were made in 2014 to move out of Midtown

–3

–4

2013

2018

2013

2018

2013

2018

2013

2018

Companies, including KKR & Co., BlackRock Inc. and Wells Fargo & Co., have plans to relocate. Many of the corporate transplants are moving out of Midtown, specifically the Plaza District, known for its Central Park views and money-is-no-object offices perched high above luxury stores like Tiffany and Prada. Their new home is built atop and around a rail yard and boasts high-rise towers with views of the Empire State Building to the east.

Midtown Departures

Midtown stands out among Manhattan office markets in companies departing for other NYC business districts.

Cumulative square feet moving out

Midtown

12

m

10

8

6

4

Downtown

2

Midtown South

0

Hudson Yards

2013

2018

Cumulative square feet moving in

12

m

10

8

Hudson Yards

6

Downtown

4

Midtown

2

0

Midtown South

2013

2018

Cumulative square feet moving out

Midtown

12

m

10

8

6

4

Downtown

2

Midtown South

Hudson Yards

0

2013

2014

2015

2016

2017

2018

Cumulative square feet moving in

12

m

10

8

Hudson Yards

6

4

Downtown

2

Midtown

Midtown South

0

2013

2014

2015

2016

2017

2018

Cumulative square feet moving out

Cumulative square feet moving in

Midtown

12

m

10

8

Hudson Yards

6

4

Downtown

Downtown

2

Midtown

Midtown South

Midtown South

Hudson Yards

0

2013

2014

2015

2016

2017

2018

2013

2014

2015

2016

2017

2018

The addresses and views may change, but Wall Street as it was envisioned in the 1790s is still alive and well. Back then, the new nation needed money and that’s where it went to get it. Captains of industry made pilgrimages to Wall Street seeking funds to build a steel mill or canal, railroad or shipping line.

“Wall Street” Is No Longer Concentrated Near Wall Street

Financial services is the largest industry by percentage to choose to move to Hudson Yards.

7,419,000 total square feet of relocations into Hudson Yards

30.0%

Financial Services

22.4%

Television, Radio

and Entertainment

15.9%

Chemicals, Cosmetics

and Pharma.

13.4%

Legal Services

9.1%

Accounting, Auditing and

Bookkeeping Services

3.4%

Mgmt.

Consulting

2.3%

Advertising and P.R.

2.0%

Insurance

1.6%

Computer

Tech.

4,101,000 total square feet of relocations into Downtown

36.1%

Printing and Publishing

16.8%

Advertising and Public Relations

14.2%

Computer Technology

13.6%

Retail

8.0%

Legal Services

6.7%

Associations

and Nonprofits

4.5%

Management

Consulting

2,318,000 total square feet of relocations into Midtown

58.3%

Financial Services

14.2%

Associations and Nonprofits

22.8%

Retail

4.7% Legal Services

688,000 total square feet of relocations in Midtown South

79.7%

Television, Radio and

Entertainment

20.3% Computer Tech.

7,419,000 total square feet of relocations into Hudson Yards

30.0%

Financial Services

22.4%

Television, Radio

and Entertainment

15.9%

Chemicals, Cosmetics

and Pharmaceuticals

9.1%

Accounting, Auditing and

Bookkeeping Services

13.4%

Legal Services

3.4%

Management

Consulting

2.3%

Advertising and P.R.

1.6%

Comp.

Tech.

2.0%

Insurance

4,101,000 total square feet of relocations into Downtown

36.1%

Printing and Publishing

16.8%

Advertising and

Public Relations

14.2%

Computer Technology

13.6%

Retail

8.0%

Legal Services

6.7%

Associations

and Nonprofits

4.5%

Management

Consulting

79.7%

Television,

Radio and

Entertainment

58.3%

Financial Services

14.2%

Associations and Nonprofits

22.8%

Retail

20.3%

Computer Tech.

4.7% Legal Services

2,318,000 total square feet of relocations into Midtown

688,000 total square feet of relocations in Midtown South

7,419,000 total square feet of relocations into Hudson Yards

30.0%

Financial Services

22.4%

Television, Radio and Entertainment

15.9%

Chemicals, Cosmetics

and Pharmaceuticals

9.1%

Accounting, Auditing and Bookkeeping Services

13.4%

Legal Services

3.4%

Management

Consulting

2.3%

Advertising and Public Relations

1.6%

Computer

Technology

2.0%

Insurance

4,101,000 total square feet of relocations into Downtown

36.1%

Printing and Publishing

16.8%

Advertising and

Public Relations

14.2%

Computer Technology

13.6%

Retail

8.0%

Legal Services

6.7%

Associations

and Nonprofits

4.5%

Management

Consulting

79.7%

Television, Radio

and Entertainment

58.3%

Financial Services

14.2%

Associations and Nonprofits

22.8%

Retail

20.3%

Computer Technology

4.7% Legal Services

2,318,000 total square feet of relocations into Midtown

688,000 total square feet of relocations in Midtown South

7,419,000 total square feet of relocations into Hudson Yards

4,101,000 total square feet of relocations into Downtown

30.0%

Financial Services

36.1%

Printing and Publishing

16.8%

Advertising and

Public Relations

22.4%

Television, Radio and Entertainment

15.9%

Chemicals, Cosmetics

and Pharmaceuticals

14.2%

Computer Technology

13.6%

Retail

8.0%

Legal Services

6.7%

Associations

and Nonprofits

4.5%

Management

Consulting

79.7%

Television, Radio

and Entertainment

58.3%

Financial Services

9.1%

Accounting, Auditing and

Bookkeeping Services

13.4%

Legal Services

14.2%

Associations and Nonprofits

22.8%

Retail

3.4%

Management

Consulting

2.3%

Advertising and

Public Relations

1.6%

Comp.

Tech.

20.3%

Computer

Technology

2.0%

Insurance

4.7% Legal Services

688K total sq. ft. of relocations in Midtown South

2,318,000 total square feet of relocations

into Midtown

“The closeness helped information flows—it was very efficient,” said Walter, who is the Seymour Milstein chair of finance and corporate governance at New York University’s Stern School of Business. “Even after hours in the bars. Lots of information passed between people.”

The New York Stock Exchange was the anchor of the old Wall Street, and for the most part, the banks, brokers, securities law firms and the rest that all made it work remained focused in and around the bourse until the early 1970s.

They were tethered by paper.

“To the extent that checks and securities were physical, proximity was essential,” said Sandy Warner, who started his career as a trainee at Morgan Guaranty Trust Co. in 1968 and rose to serve as chief executive officer of JPMorgan & Co. from 1995 to 2000.

That all began to change after the introduction of the IBM mainframe in the late 1960s and the adoption of a numbering system known as CUSIP to keep track of securities. With trading no longer dependent on swapping paper stocks and checks, the titans of Wall Street were free to move out of downtown. Among the first to go was Morgan Stanley, which moved first to Sixth Avenue and then to Broadway near Times Square around 1995. It’s still there today.

Hudson Yards is an entirely new residential and business district being built over the West Side Rail Yards.

Wall Street’s next big relocation came after the terrorist attacks on Sept. 11, 2001, as backup facilities outside the city were expanded, and more firms began moving uptown. Lehman Brothers Holdings Inc. had just finished building a new trading floor at 3 World Financial Center, across the street from the Twin Towers, when the collapse of the north tower sent debris crashing into the building. It moved to a Midtown skyscraper, where it remained until its bankruptcy in 2008 triggered the Great Recession.

Morgan Stanley’s Dean Witter unit, which was located on the lower floors of the south tower, mostly relocated to Purchase, New York. And institutional brokerage Cantor Fitzgerald LP, which suffered the greatest loss of life of any World Trade Center tenant, ultimately wound up on the lower floors of 499 Park Ave. in Midtown.

All Roads Lead to Hudson Yards

Top company relocations between markets

Lines sized by office square feet:

100K

500K

1M

Moving from

Amazon

BlackRock

Multiple office

locations

Deutsche Bank

EY

Group M

Downtown

JPMorgan

KKR

Markit North America

McKinsey

Milbank Tweed

Nasdaq

Point72

Midtown

R/GA Media

Skadden Arps

Time Inc

Midtown

South

Time Warner

Tommy Hilfiger

Twitter

Moving to

Amazon

BlackRock

Deutsche Bank

EY

Downtown

Group M

JPMorgan

KKR

Markit North America

McKinsey

Hudson Yards

Milbank Tweed

Nasdaq

Point72

R/GA Media

Skadden Arps

Midtown

Time Inc

Midtown

South

Time Warner

Tommy Hilfiger

Twitter

Lines sized by office sq. ft.

Tap on market or company names for more info

Moving from

Moving to

Amazon

BlackRock

Multiple office

locations

Deutsche Bank

EY

Downtown

Group M

Downtown

JPMorgan

KKR

Markit North America

McKinsey

Hudson Yards

Milbank Tweed

Nasdaq

Point72

Midtown

R/GA Media

Skadden Arps

Midtown

Time Inc

Midtown

South

Time Warner

Midtown

South

Tommy Hilfiger

Twitter

Lines sized by office square feet

Mouse over market or company names for more info

Moving from

Moving to

Amazon

BlackRock

Multiple office

locations

Deutsche Bank

EY

Downtown

Group M

Downtown

JPMorgan

KKR

Markit North America

McKinsey

Hudson Yards

Milbank Tweed

Nasdaq

Point72

Midtown

R/GA Media

Skadden Arps

Midtown

Time Inc

Midtown

South

Midtown

South

Time Warner

Tommy Hilfiger

Twitter

But Midtown, once able to lure powerhouse financial firms with sprawling office space, has been falling out of favor. Over the past five years, a net 10 million square feet of occupancies has either moved or is planning to move from Midtown, which is the U.S.’s costliest business district, according to real estate brokerage Savills Studley Inc. Over the same period, Hudson Yards has attracted 6.7 million net square feet of leases, while lower Manhattan’s net was 1.2 million square feet.

City officials, aware of the rising glut of space in midtown, last year rezoned the area around and north of Grand Central Terminal to allow for larger buildings. The move is making it possible for JPMorgan, which had once considered moving to Hudson Yards, to stay at 270 Park and build a larger building there.

Concentrating on the West Side

Manhattan’s center of business gravity moves south and west.

Old address
New address

Hudson Yards

Financing District

Wall St.

1 mile

Hudson Yards

Financing District

Wall Street

1 mile

Hudson Yards

Financing District

Wall Street

1 mile

Time Warner

KKR

Point72

Time Warner

McKinsey

BlackRock

Time Inc.

Skadden

Arps

Twitter

Markit North

America

Point72

Markit North

America

EY

R/GA Media

Group M

Tommy

Hilfiger

Nasdaq

Milbank Tweed

Deutsche Bank

Time Warner

KKR

Point72

Time Warner

McKinsey

BlackRock

Time Inc.

Skadden

Arps

Twitter

Markit North

America

Point72

EY

Markit North

America

R/GA Media

Group M

Tommy

Hilfiger

Nasdaq

Milbank Tweed

Deutsche Bank

Deutsche

Bank

Nasdaq

Milbank

Tweed

Tommy

Hilfiger

BlackRock

Point72

EY

Skadden Arps

KKR

Amazon

Time Warner

JPMorgan

Markit North America

R/GA Media

Twitter

Group M

McKinsey

Time Inc.

Deutsche

Bank

Nasdaq

Tommy

Hilfiger

Milbank

Tweed

Point72

BlackRock

EY

Skadden Arps

KKR

Time Warner

Amazon

JPMorgan

Markit North America

R/GA Media

Twitter

Group M

McKinsey

Time Inc.

Time Warner

KKR

Deutsche

Bank

Point72

Time Warner

McKinsey

BlackRock

Time Inc.

Skadden

Arps

Twitter

Markit North

America

Point72

Nasdaq

Markit North

America

EY

R/GA Media

Milbank

Tweed

Tommy

Hilfiger

Group M

BlackRock

Point72

EY

Skadden Arps

KKR

Amazon

Time Warner

JPMorgan

Tommy

Hilfiger

Markit North America

R/GA Media

Twitter

Group M

McKinsey

Nasdaq

Milbank Tweed

Time Inc.

Deutsche Bank

Time Warner

KKR

Deutsche

Bank

Point72

Time Warner

McKinsey

BlackRock

Time Inc.

Skadden

Arps

Twitter

Markit North

America

Nasdaq

Point72

EY

Markit North

America

R/GA Media

Tommy

Hilfiger

Milbank

Tweed

Group M

Point72

BlackRock

EY

Skadden Arps

KKR

Time Warner

Amazon

JPMorgan

Markit North America

Tommy

Hilfiger

R/GA Media

Twitter

Group M

McKinsey

Nasdaq

Milbank Tweed

Time Inc.

Deutsche Bank

Recruitment and retention are now a growing factor in deciding where to set up, said David Goldstein, a vice chairman at Savills Studley, whose clients range from corporate law firms like Kirkland & Ellis LLP to retailers such as Ralph Lauren Corp. Financial firms are vying for the same young engineers and developers as Facebook Inc. and Amazon.com Inc., he said. The online retail giant late last year also announced a move to Hudson Yards.

The geography of the city is “really up for grabs,” he said. “The bank is looking more and more like a tech firm with every passing day.”