With asking rents for Downtown Brooklyn office space now rivaling some Manhattan submarkets, it appears likely that investment banking giant Morgan Stanley will look to shrink its footprint in the borough as part of a move toward “lower-cost centers.”
While Morgan Stanley rents around 340,000 square feet in Brooklyn – including space at Forest City’s 1 Pierrepont Plaza – its footprint there has been steadily shrinking. The company was renting about 670,000 square feet in the borough as of 2011, and it has a Brooklyn office lease expiring and several additional Brooklyn leases due to expire before 2023.
It all appears to tie into Morgan Stanley CEO James Gorman’s comments earlier this week that “too many employees [are] based in high-cost centers doing work that can sensibly be done in lower-cost centers,” according to Crain’s.
Average asking rents for office space in Downtown Brooklyn are now $52 per square foot, according to Newmark Grubb Knight Frank, and Morgan Stanley is one of many financial institutions now dealing with concerns about declining equity markets, collapsing commodities prices and fears of a global economic slowdown.
Morgan Stanley could transfer its Brooklyn back-office jobs to the Indian city of Bangalore, where last year it leased 184,000 square feet of space capable of housing 1,400 employees, it said. For comparison, rents in the bank’s Bangalore neighborhood average around $12 per square foot, per Colliers International. [Crain’s] – Rey Mashayekhi