Early in the pandemic, KPMG published a survey revealing nearly 70 percent of CEOs expected to downsize office space as a result of the pandemic.
The firm is joining those ranks.
The global audit and consulting firm announced Tuesday its move to Brookfield Properties’ Two Manhattan West, where it will occupy approximately 450,000 square feet. KPMG expects to transition over once construction is completed in late 2025, where up to 5,500 people will work.
The office lease is the largest this year in New York City, a Brookfield representative told The Real Deal. The 20-year commitment will span floors 13 through 24. No additional terms of the lease were disclosed.
The tower will serve as KPMG’s headquarters. It is the third tenant to sign at the building, which is 56 percent leased.
According to a Brookfield representative, CBRE’s Michael Geoghegan and Lewis Miller were among those representing KPMG, while Brookfield was represented in-house by a team including Jeremiah Larkin and Duncan McCuaig, as well as by Cushman and Wakefield.
KPMG has been on the hunt for new office space since 2018, according to the Wall Street Journal. But the company hadn’t been planning on cutting space until the pandemic dictated it was the correct move for the firm, which is operating under a hybrid work model.
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Brookfield moves forward with plans for 2 Manhattan West
While Brookfield is popping the bubbly, things for the greater office market are less positive. KPMG, for example, is leaving a significant void to fill. It has been working out of three offices in Manhattan, spanning approximately 800,000 square feet. Its move will result in a net loss of about 350,000 square feet of leased office space in Manhattan.
Landlords that will soon have big spaces to fill are Rudin Management (345 Park Avenue and 560 Lexington Avenue) and SL Green (1350 Sixth Avenue).
In June, Brookfield announced that international law firm Clifford Chance was leasing 144,000 square feet at Two Manhattan West. Financial terms of that lease were also not disclosed.
Construction on the 58-story, 1.9-million-square-foot Hudson Yards office property is set to be completed early next year. Tenant amenities at the building include a 3,200-square-foot landscaped terrace, bike storage, conference centers and a fitness and wellness center.
Cravath Swaine & Moore, another law firm, is set to take 350,000 square feet at the building. Amazon was reportedly considering space at the property too, but a deal never materialized.
Brookfield filed plans for the building in 2017, setting the stage for one of the last buildings of its five-building Manhattan West complex. Construction was initially pegged to wrap this year.