JP Morgan mulls head office move

Bank is in early stages of planning a move for its headquarters within the city as it seeks lower-cost office locations for employees

PUBLISHED : Wednesday, 13 August, 2014, 5:05am
UPDATED : Wednesday, 13 August, 2014, 6:29am

JP Morgan Chase, the biggest US bank, is considering moving its headquarters within New York as the company has fewer employees in the nation's largest city, according to a person briefed on the discussions.

The potential plans, which include taking office space in Manhattan developments at the World Trade Centre or Hudson Yards, are in early stages and no decision is imminent, said the person, who asked not to be identified because the talks are private. JP Morgan has moved back-office jobs to New Jersey, Delaware and Florida to cut expenses, the person said.

Banks, under pressure to boost returns, have been seeking lower-cost locations for employees who do not interact with clients. JP Morgan is examining its property holdings in New York, where it had 1.1 million square metres at the end of 2013, including 120,774 square metres at its 270 Park Avenue headquarters.

JP Morgan sold its 60-storey skyscraper at 1 Chase Manhattan Plaza last year to Shanghai-based Fosun International, and began moving 2,000 employees to offices in Brooklyn's MetroTech Centre this year. JP Morgan owns the Park Avenue building as well as the former headquarters of Bear Stearns at 383 Madison Avenue, which it acquired in 2008.

The bank may keep 270 Park and take some space in new projects, or it could opt to refurbish the Madison Avenue building, said the person. Any decisions probably will not result in moves for several years, the person said. The New York Post reported details of JP Morgan's plans earlier yesterday.

Citigroup, the third-biggest US bank, will move its New York headquarters from 399 Park Avenue to buildings it occupies on Greenwich Street in lower Manhattan, chief executive Michael Corbat said in April. The bank will leave the Park Avenue building when its lease expires in 2017.

Bank of New York Mellon, the world's largest custody bank, agreed in May to sell its headquarters at 1 Wall Street to a joint venture led by Macklowe Properties for US$585 million. BNY Mellon is moving to Brookfield Place, the lower Manhattan complex formerly known as the World Financial Centre.

Other banks have relocated jobs out of New York, including Goldman Sachs Group, which added personnel in Dallas and Salt Lake City.

JP Morgan chief executive Jamie Dimon said at an economic summit in Miami last year that Florida has more business-friendly policies than New York, and he joked that he sometimes wonders why the company does not move to Miami.

In June, JP Morgan paid US$14.7 million to buy a Jersey City building it had been leasing, according to the Record newspaper in nearby Hackensack.

A month earlier, New Jersey awarded the bank US$22.5 million in annual tax credits for 10 years to create 1,000 jobs in the state and retain 2,612 others.

The Port Authority of New York and New Jersey owns the World Trade Centre site, and Silverstein Properties has plans for three buildings at the location, with 4 World Trade Centre already open. One World Trade Centre, which was co-developed by the Durst Organisation, is scheduled to open by the end of the year.

Hudson Yards is a 28-acre project by Related, developer of New York's Time Warner Centre, that the firm calls the biggest private real estate development in US history.

The site, over railway yards along the Hudson River in midtown Manhattan, will feature five office towers and 5,000 residences, according to Related's website for the project.

"We're starting to see lots of interest from even financial-services sectors, hedge funds, private-equity funds," Related chief executive Jeff Blau said in a Bloomberg Television interview last month.

"Interestingly, they're all looking for large floor plates. And so if you think about the buildings that exist today around New York City, there's not many options for them."