Morgan Stanley is keeping its faith in New York City’s office culture in the new year, agreeing to one of the city’s biggest leases since the onset of the pandemic.
The investment bank is poised to take over roughly 400,000 square feet at 55 East 52nd Street, also known as Park Avenue Plaza, Bloomberg reported. The 15-year lease will replace BlackRock’s headquarters as that firm moves to Hudson Yards next year.
Morgan Stanley’s presence in the city is expansive, including headquarters at 1585 Broadway in Times Square. The bank already leased more than 93,000 square feet at Park Avenue Plaza prior to its latest agreement.
According to Bloomberg, JLL represented Morgan Stanley in the lease negotiations, while CBRE represented Fisher Brothers, the building’s landlord.
Morgan Stanley’s expansion at the building is a promising sign for the property’s future. Nearly half of the 45-story office tower in Midtown East is leased to BlackRock and insurance giant Aon, both of which are set to depart in April 2023.
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Asset management firm Jennison Associates agreed to lease 119,000 square feet, according to Morningstar DBRS. The lease, which was signed last February for $93 per square foot, won’t expire until 2040.
Aon’s 209,000-square-foot space, meanwhile, is largely subleased to financial firms Evercore and General Atlantic. Both companies have agreements in place to become leasing tenants after Aon leaves.
As of Oct. 1, the building was 99 percent leased to 11 tenants. The building is owned through a joint venture between Fisher Brothers and Zhang Xin and Pan Shiyi. The project recently received a $575 million CMBS debt package to be sold as bonds to investors; interestingly, the loan was originated by Morgan Stanley.
Morgan Stanley CEO Jamie Gorman previously sparked headlines when he said in June 2021 he would be “very disappointed” if employees weren’t back in the office by Labor Day. Gorman has since walked back his comments amid a surge in cases tied to the Omicron coronavirus variant.
Additional terms of Morgan Stanley’s new lease aren’t clear. Last year’s largest office lease in Manhattan by money was by MSG Entertainment at 2 Penn Plaza, which is paying $951 million over 20 years for 428,000 square feet at a Vornado building slated for expansion.
[Bloomberg] — Holden Walter-Warner