The Real Deal New York

Big banks sticking put, passing on new office towers

February 11, 2014 11:30AM

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From left: 11 Madison Avenue and Joseph Harbert

11 Madison Avenue and Joseph Harbert

More marquee financial companies are choosing to stay in their current office locations rather than upgrading to Manhattan’s much-trumpeted new towers, according to the latest data.

Information collected by brokerage Newmark Grubb Knight Frank found that five of the six biggest New York leases since the end of 2012 have been renewals.

That includes banking heavyweights like Credit Suisse, Citigroup and UBS, Bloomberg reported. Credit Suisse, for example, renewed its 2.2-million-square-foot lease at 11 Madison Avenue for $1.5 billion last year until 2017.

“Major financial institutions are not expanding dramatically,” said Joseph Harbert, the eastern region president of Manhattan-based commercial brokerage Colliers International, to Bloomberg. “If you’re going to lease up a new building, you’re going to have to do it with other tenants.”

While some firms, like banking institutions, are looking to downsize their space needs (and their budgets), technology and media firms have mostly opted for older buildings as of late — meaning developers may be hard-pressed to find tenants to fill the more than 25 million square feet of new office space in the pipeline or already built, according to the article. [Bloomberg] – Angela Hunt

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