JPMorgan Said to Plan Move of 2,000 Workers to BrooklynDavid M. Levitt and Hugh Son
JPMorgan Chase & Co., the biggest U.S. lender, is moving about 2,000 employees to offices in Brooklyn’s MetroTech Center after a review of its real estate holdings, said a person with direct knowledge of the plan.
The biggest single source of employees heading to Brooklyn by year-end is 1 Chase Manhattan Plaza, the 60-story lower Manhattan skyscraper the bank sold to Shanghai-based Fosun International Ltd. in 2013, said the person, who asked not to be identified because the move isn’t public. The employees are from several of the bank’s business lines, the person said.
JPMorgan is consolidating its real estate as it pushes to trim expenses and simplify itself by exiting businesses including student lending and private equity. Offices in and near downtown Brooklyn, where MetroTech Center is located, are among the most in demand in the city, in particular drawing young technology and social-media companies.
If JPMorgan follows through with its plans, it will show that the market also can appeal to traditional financial firms while it tries to attract and retain young talent, said Tucker Reed, president of the Downtown Brooklyn Partnership, a group representing local businesses.
“Were they to come, it would be a validation of our office market here,” Reed said in a telephone interview. “The only drawback, if you can call it that, would be the challenge it creates. It means there would be even less office space for us to grow into. It makes our space dilemma a little more acute, but that’s a good problem to have.”
Brooklyn’s 15.5 million square feet (1.4 million square meters) of offices are more than 96 percent occupied, data from CBRE Group Inc. show. By comparison, Manhattan’s tightest office market -- the area roughly from 30th to Canal streets, known as midtown south -- has a 93 percent occupancy rate, according to the real estate services firm.
MetroTech Center is a 3.7 million-square-foot office campus close to the Brooklyn and Manhattan bridges. JPMorgan owns two buildings at the complex.
Another group of Chase Plaza-based staff members is bound for the bank’s offices at the Newport office complex on Washington Street in Jersey City, New Jersey, the person said. The transfers started in December and will continue throughout 2014, according to the person.
The lender intends to keep about 300,000 to 400,000 square feet of offices at Chase Plaza, the person said. JPMorgan occupied about half the space in the 2.2 million-square-foot tower, according to data from CoStar Group Inc.
“We’re continually looking at ways to ensure that our space and occupancy strategy aligns with the ever-evolving needs of our business,” Melissa Shuffield, a spokeswoman for the bank, said in an e-mail.
As recently as 2012, JPMorgan considered giving up at least some of its offices at MetroTech, listing about 700,000 square feet for rent, according to the person. After floods from Hurricane Sandy damaged bank offices at 4 New York Plaza, another downtown Manhattan tower, displaced workers were moved temporarily into the Brooklyn space.
JPMorgan owns 4 MetroTech Center, with about 1.35 million square feet, and 3 MetroTech Center, according to Mrofficespace.com, a website that tracks New York office buildings. The other six buildings at the office park are owned by Forest City Ratner Cos., which started building MetroTech in the late 1980s.
The 16-acre (6.5-hectare) campus was Brooklyn’s first modern office development, built in partnership with the New York City government. Many of its earlier tenants have been financial firms, including Bank of New York and Bear Stearns Cos., which used the properties for back-office operations.
In recent years, the complex has attracted technology and media companies such as MakerBot Industries LLC, a developer of three-dimensional printers; and ImpreMedia LLC, which publishes Hispanic newspapers including New York’s El Diario La Prensa.
“Downtown Brooklyn has now become a very diverse ecosystem of varied companies that are more reflective of all of Brooklyn and all of New York City,” said Ali Esmaeilzadeh, vice president of commercial development and leasing at Forest City Ratner. “There’s still the presence of government and back-office, there’s also a surge in technology-based firms, entrepreneurial-type companies.”