By Daniel Geiger
Morgan Stanley is said to be closing in on a deal to renew and expand its lease at One New York Plaza in what would be a roughly 1 million s/f transaction.
The bank, which has long been rumored to be considering the lease, has a little over 700,000 s/f in the tower, but will likely consolidate another office facility it has in downtown Brooklyn into the property.
Morgan Stanley recently renewed a portion of its Brooklyn space, which is located at One Pierrepont Plaza. In that transaction, which happened in June, the company extended its lease for 200,000 s/f of the 450,000 s/f it occupies in the property for 10 years.
Brokers familiar with that decision say that portion of the Brooklyn space the bank is keeping will be retained primarily for data center functions, and that the office space there will be brought to One New York Plaza.
A person with inside knowledge of Morgan Stanley’s real estate decision making at One New York Plaza said that a lease has not yet been completed, but brokers familiar with the firm indicate that a deal appears imminent.
The transaction would be good news for Brookfield Properties, the large office REIT that owns One New York Plaza and several other office buildings in lower Manhattan, including the eight million s/f World Financial Center office complex. At One New York Plaza, the deal with Morgan Stanley would absorb a roughly 300,000 s/f block that was vacated by Goldman Sachs when the firm consolidated several locations downtown into its new office tower on West Street.
Brookfield has had several other prominent vacancies open in its portfolio, primarily at the World Financial Center.
Last month, Nomura Securities, the Japanese financial firm, decided to relocate its operations from Two World Financial Center to the midtown office tower Worldwide Plaza in a 900,000 s/f deal. Merrill Lynch, the complex’s largest tenant, also announced that it would be reducing the roughly three million s/f it occupies there by about half. In past months, Deloitte, which occupied space on a sublease from Merrill, opted to move to Rockefeller Center rather than renew its deal with Brookfield.
The large vacancy at the World Financial Center has left brokers wondering whether Brookfield will appoint an outside leasing agent to the complex from one of the city’s major brokerage firms. Brookfield Properties has typically handled leasing using an in house team of staff brokers. Earlier in the summer however, the company appointed Mitch Rudin, the former New York area CEO of CB Richard Ellis as its top North American executive. The move was seen at least in part as a way to bolster the company’s New York area leasing expertise and perhaps also deepen its connection to the brokerage community.
World Financial Center may not have large blocks of vacancy for long however. The law firm Milbank is rumored to be considering a roughly 300,000 to 350,000 s/f deal at the top of Four World Financial Center, though it is not yet clear whether the firm will go through with the transaction. Some sources say that the Milbank is also still considering other options in the market, including the World Trade Center.
Jefferies, another large tenant looking for hundreds of thousands of s/f, is also said to have considered the World Financial Center as a possible location. The financial firm had been negotiating a potential lease at Worldwide Plaza that was nixed when Nomura Securities signed its deal, which absorbed virtually all of that building’s vacancy.
Representatives at Morgan Stanley did not return calls seeking comment on the firm’s pending renewal deal at One New York Plaza nor did the firm’s broker, Barry Gosin of Newmark Knight Frank. Brookfield Properties also would not comment.
Dale Schlather, an executive at the real estate services firm Cushman & Wakefield that represents both Milbank and Jefferies, was not available for comment.
