Wall Street firms like Alliance Bernstein and HSBC with leases expiring in the near term are turning up the heat on their searches for new offices, in part because they believe President-elect Donald Trump will reduce corporate taxes and roll back regulations.
Because financial firms with hundreds of thousands of square feet can take several years to move into new offices, they have consider their real estate plans well ahead of their lease expirations.
Alliance Bernstein, for example won’t see its 600,000-square-foot lease at 1345 Sixth Avenue expire until 2024, but the company is already checking out properties like the towers in Hudson Yards, 4 Times Square and 1271 Sixth Avenue, the Wall Street Journal reported.
“We regularly review our real estate portfolio to ensure it remains appropriate for the future needs of the business,” a spokesman for HSBC told the Journal.
Private equity giant KKR, Wells Fargo Securities and BlackRock have already committed to moving to Hudson Yards. Industry insiders said that at least some of the new activity is driven by a belief that Trump will cut costs for the financial-services sector. In addition, banks are watching their balance sheets closely and considering moving more people into less square footage and scouring less expensive neighborhoods and cities for back-offices.
“In any given week, I will have upwards of 10 meetings with real-estate managers of these types of companies [financial-services firms], asking ‘How am I going to keep cost structure flat and accommodate the firm in three to five years?’ ” said JLL managing director Michael Shenot.
Big financial firms have dialed back their office requirements since the recession, and others like JP Morgan have relocated outside the city to places like Jersey City.
Wall Street companies went from occupying 32 percent of Manhattan’s office stock to 25 percent in the last four years, during which time TAMI firms have increased their slice of the pie from 19 percent to 24 percent, according to JLL. [WSJ] – Rich Bockmann