As Wall Street continues to swagger back from the brink, once again enjoying outsized profits and sneering at federal regulators, it means good news for at least one group of New Yorkers: landlords.
As The Journal reports today, no fewer than eight major banks are each looking for at least 500,000 square feet of office space in the city. They are hunting for bargains as much as anything, taking advantage of lower rents while uncertain of their own futures and that of the economy:
The swelling interest comes in large part as numerous financial firms that put off decisions for years are nearing the end of their leases. Still, compared with similar bursts of leasing activity in earlier economic cycles, the demand this time appears modest. In the last years of the latest boom era, for example, banks from Morgan Stanley to Merrill Lynch to Lehman Bros. predicted major growth and drew up plans to develop soaring new office towers. The economy turned, and none were built.
This time, by and large, the major firms in the financial industry are looking for similar amounts of space to what they currently occupy—or small expansions. This tempered leasing outlook reflects cost-conscious banks dealing with sluggish revenue growth and the looming costs of new regulatory and capital requirements. With national job growth slow and the housing sector still declining, there are rising fears the recovery will stay sluggish.
By The Journal’s count, four banks are actively considering new leases and four are exploring the possibility: Bank of America at the World Financial Center and 114 West 47th Street; Morgan Stanley at 1 New York Plaza; Nomura Group at the World Financial Center; and UBS in Stamford are in the first group. In the second are Credit Suisse at 11 Madison Avenue; Deutsche Bank at 60 Wall Street; Jeffries Group at 520 Madison Avenue; and Citigroup with sites throughout the city.
The Observer has chronicled a number of these possible moves, including Nomura’s waffling between the WFC and Worldwide Plaza and whether Morgan Stanley might move to the World Trade Center.
So long as this does not mean a resurgence in new bank branches across the city, this seems like a big pay day for New York.
