Rather than reabsorbing the office space they cast off during the economic downturn, big banks are continuing to decrease their presence in Manhattan. The 10 largest banks in the city reduced their space by 6 million square feet to just under 32 million square feet between 2008 and early 2012, according to a report by International Strategy & Investment Group.
Since that report was issued last year, banks are planning on further decreasing their space, leading to a stubbornly slow pace of rent growth in the office market. Landlords and brokers have shifted their attention to tenants in the technology, advertising and media sectors.
The large financial firms are “not as relevant to today’s market, for now,” Dennis Friedrich, CEO of real estate investment trust Brookfield Office Properties, told the Wall Street Journal. “We’ve changed our strategy.”
Earlier this year Brookfield rechristened its Downtown office tower Brookfield Place, changing the name from World Financial Center, a nod to the waning influence of financial tenants, according to the newspaper. Earlier this month, a Bank of America lease in the building from the 1980s expired, leading the bank to reduce its presence from 2.3 million square feet to 800,000 square feet. [WSJ] — Hiten Samtani