Deutsche Bank‘s asset management spinoff has finalized a deal to relocate its Midtown offices on the heels of an initial public offering last month that valued the company at nearly $8 billion.
DWS Group, which was previously known as Deutsche Asset Management before the German banking giant rebranded the unit last year ahead of its IPO, signed a lease for 82,000 square feet at Global Holdings Management Group‘s 875 Third Avenue, sources told The Real Deal.
The move is likely to generate significant cost savings for DWS, which will be relocating its offices two blocks east from Rudin Management’s 345 Park Avenue.
The asking rent for DWS’ 15-year lease was $82 per square foot, and while it wasn’t clear what it would have cost to renew at Rudin’s building, Park Avenue office space is among the priciest in the city.
The average asking rent on Park Avenue in Midtown was just shy of $107 per square foot during the first quarter, according to Newmark Knight Frank. That’s a 45 percent premium over the average of nearly $74 per square foot for the East Side, which covers the section of Midtown east of Park Avenue to the river.
A spokesperson for DWS declined to comment, and a representative for Global Holdings — which is run by Israeli billionaire Eyal Ofer — couldn’t be immediately reached.
JLL’s Ken Siegel and Peter Riguardi represented DWS in the deal. A separate JLL team of Paul Glickman, Diana Biasotti and Harley Dalton handle leasing at the 665,000-square-foot building, which Global Holdings bought from. Boston Properties in 2003 for for $370 million.
The brokers couldn’t be immediately reached for comment.
DWS will be moving into space at 875 Third occupied by the law firm Hogan Lovells, which is relocating to 390 Madison Avenue – the Midtown property currently undergoing a major redevelopment by L&L Holding Company and Clarion Partners (as the managing agent on behalf of the New York State Common Retirement Fund).
DWS manages €700 billion (or roughly $850 billion) for institutions and private investors. Deutsche Bank debuted the 60-year-old company on the Frankfurt stock exchange in March, selling a 22.5 percent stake in the company valuing it €6.5 billion (about $7.9 billion).
The move was part of a plan to create new a new revenue stream for Deutsche in an effort to turn around three successive years of losses at the bank. That poor performance led the German institution earlier this month to shake things up and name Christian Sewing as the bank’s new chief executive to replace outgoing CEO John Cryan.
Sewing faces some tough decisions that will chart the future of the bank, including what to do with its headquarters here in New York City. Deutsche Bank is currently headquartered Downtown at 60 Wall Street, and has been looking for a new office that could be as big as 1.3 million square feet.
Potential new homes include Two World Trade Center, 50 Hudson Yards and the Time Warner Center. The bank could also decide to renew and stay put.