Commercial Observer

Federal Reserve Takes 33 Maiden Lane

The Federal Reserve of New York has stepped in to buy 33 Maiden Lane, a 570,000-square-foot downtown skyscraper that the Fed uses for a portion of its Manhattan offices. 

“The Federal Reserve Bank of New York has entered into an agreement to acquire the building at 33 Maiden Lane in lower Manhattan,” a New York Fed spokesperson confirmed in a prepared statement issued yesterday afternoon to The Commercial Observer. “The Bank is now in a final due diligence phase prior to the expected closing in the first quarter.”

33 maiden lane 2 Federal Reserve Takes 33 Maiden Lane

33 Maiden Lane.

The building, which is being sold by the real estate investment company Invesco, serves as a large ancillary office for the New York Fed, which bases its operations in the neighboring building 33 Liberty Street.

The large real estate investment trust Vornado had been in contract to purchase the building, which was placed on the market by Invesco last year. According to sources however, in a surprise move, the New York Fed exercised rights that are sewn into its leasing agreement at the property allowing it the option to match Vornado’s offer for the building.

Market sources familiar with 33 Maiden Lane estimate that the building will trade for around $300 per square foot, a price that would place the total sale at about $170 million.

The New York Fed spokeswoman said that the bank was buying the building to allow it to potentially profit on its appreciation and because it will give the bank greater control over its operations.

“The acquisition will provide a long-term economic benefit for the Bank as well as allow for greater control over the maintenance, operation and security of the building,” the spokeswoman’s statement said.

The New York Fed is one of 12 banks in the U.S. Federal Reserve system and is where Washington monetary policy is actually implemented. 33 Liberty Street, the New York Fed’s nearby headquarters, is famous for its underground vault, thought to be the world’s largest gold respository.

The Fed made waves today by offering a projection that it wouldn’t raise interest rates until 2014, a statement that suggested the country’s central bank doesn’t forecast an economic recovery for years to come.