RBC Renews Lease on Office Space at Manhattan's Brookfield PlaceBy
Canadian bank weighed moves before extending 200 Vesey lease
RBC is tower’s second-largest occupant, after American Express
Royal Bank of Canada, that country’s largest lender by assets, renewed its lease at a Brookfield Property Partners LP office tower in lower Manhattan, with plans to stay at the building until at least 2032.
The bank will remain in about 400,000 square feet (37,000 square meters) at 200 Vesey St., part of the 8.4 million-square-foot Brookfield Place New York. RBC executives said they considered moving to other towers in downtown Manhattan, as well as locations in Midtown, including Hudson Yards and other Brookfield skyscrapers, before deciding to stay put for at least 15 years. Its lease would have expired in 2022. Neither RBC nor Brookfield would disclose the rent the bank agreed to pay.
RBC will continue to be the second-largest occupant in the 2.1 million-square-foot tower, which sits across West Street from the World Trade Center and serves as the headquarters of American Express Co., which owns its 1.3 million square feet. One of the factors in deciding to stay was to maintain RBC’s proximity to its offices in the Goldman Sachs Group Inc. tower in Jersey City, New Jersey, one stop on the PATH train across the Hudson River, said Kenneth Petschauer, the bank’s head of corporate real estate in the U.S.
The decision is “reinforcing the position we’ve stated to employees of keeping continuity, with a building on one side of the river, and another directly opposite, making it easily accessible for folks to meet, greet and conduct business,” Petschauer said.
The agreement averts the loss of a tenant at Brookfield Place, where about 3 million square feet were vacated in 2013 when Bank of America Corp. gave up most of the space that had been leased to Merrill Lynch & Co. before it was bought out by the bank. Brookfield refilled almost all of that space, leasing to tenants including Time Inc., the Jones Day law firm and Bank of New York Mellon Corp. The American Express building is about 12.5 percent vacant, Brookfield spokesman Andrew Brent said in an e-mail, while Brookfield Place has an overall vacancy of 4.8 percent.
“You’re always concerned when tenants start to look at the market, but lower Manhattan provides a real basis for demand from tenants,” said David Cheikin, executive vice president for the New York region at Brookfield. “What it offers is a great amenity base for employees, and a great commuting base for their employees. We continually hear from tenants it reaffirms their ability to attract and retain talent.”
RBC was represented by a team of brokers from Cushman & Wakefield led by Bruce Mosler. Brookfield used its own employees.