In a city whose office market depends heavily on financial institutions, several key tenants are downsizing.
JPMorgan Chase, New York City’s largest office tenant, cut its commercial footprint by 400,000 square feet last year, Crain’s reported. The bank, which has said it plans to “significantly reduce” its global office footprint in the coming years, also downsized by 300,000 square feet in 2020.
The financial institution still rents 8.7 million square feet in the city, according to Crain’s, but an entity of its size — particularly one whose CEO was at the vanguard of the return-to-office movement last year, can create a ripple effect if other firms decide to follow suit.
According to Crain’s, Wells Fargo reduced its commercial space in the city by 600,000 square feet last year. Bank of New York Mellon, financial index provider MSCI and insurance firm Voya Financial are also downsizing their nationwide footprints.
JPMorgan spokesperson Michael Fusco told the publication that the firm remains “committed to New York City and planning for the next 50 years,” referencing its new headquarters under construction at 270 Park Avenue. Approximately 14,000 of the bank’s employees are expected to work out of the office.
But JPMorgan’s actions indicate that it might be hedging its bets. The bank is looking to sublease 700,000 square feet at 4 New York Plaza in the Financial District and 100,000 square feet at its Hudson Yards office at 5 Manhattan West, Bloomberg reported Wednesday.
“Remote work will change how we manage our real estate,” JPMorgan Chase CEO Jamie Dimon wrote in a letter to shareholders last year.
Office landlords are still reeling from the pandemic, with the latest market report in Manhattan indicating that office availability reached a new high in February. Just under 94 million square feet of office space were available to rent in Manhattan last month, according to a Colliers report.
The availability rate, meanwhile, hit 17.4 percent, a 74 percent increase from the start of the pandemic. Average asking rents across the borough are up only slightly from their pandemic lows, at $74.88 per square foot, nearly 6 percent below pre-pandemic levels.
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[Crain’s] — Holden Walter-Warner