Law firm reverses course, shies away from World Financial Center deal

After much speculation that they would move to Brookfield Properties‘ largely vacant World Financial Center in Lower Manhattan, law firm Milbank Tweed, Hadley & McCloy LLP may stay at 1 Chase Manhattan Plaza, the New York Observer reported. The firm occupies 375,000 square feet on several floors at the property owned by JP Morgan Chase.

Brokers told the Observer that lease negotiations with Brookfield were so advanced that Brookfield was representing an approximately 300,000 square foot space as “spoken for,” in their negotiations with other companies. But sources said that the firm is now in negotiations to renew their existing lease at 1 Chase Manhattan, on the corner of Liberty and William streets in Lower Manhattan.

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The projected glut of commercial space in Lower Manhattan will fall particularly hard on Brookfield, which recently lost huge tenants — Nomura, a Japanese financial services company, and Deloitte have decided to move in the last year. Nomura inked a deal last summer at Worldwide Plaza, near Columbus Circle, while the accounting giant moved to 30 Rockefeller Center.

Dale Schlather, an executive at Cushman & Wakefield, is representing Milbank in on-going negotiations, the Observer said. [NYO]