NYC’s Park Avenue Avoids Blow as JPMorgan Chooses to Stay

By David M. Levitt

The decision by JPMorgan (JPM) Chase & Co. to keep its headquarters on Manhattan’s Park Avenue saves the Midtown neighborhood from what would have been a deep blow.
The biggest U.S. bank occupies about 11 percent of the office space in the submarket, and about 3 percent of the larger area surrounding Grand Central Terminal, according to data from Cushman & Wakefield Inc. A departure by JPMorgan theoretically could have driven the vacancy rate on Park Avenue to as high as 26 percent from the current 15.2 percent, the brokerage said.
JPMorgan two days ago reversed course and broke off talks to move its headquarters to the Hudson Yards district on Manhattan’s far west side, which would have
greatly accelerated development in that area. The bank would have joined Time Warner Inc., luxury-handbag maker Coach Inc., cosmetics maker L’Oreal SA and the city’s first Neiman Marcus department store, all of which have agreed to take space in the once-gritty industrial zone near the Hudson River.
The bank’s decision to remain at its headquarters at 270 Park Ave. is “a very positive development for the Grand Central area,” said Michael Cohen, tri-state regional president of Colliers International, a real estate brokerage with offices in New York. “I’d be hard put to think of anybody that has a greater concentration of space within five to 10 blocks of Grand Central.”

Photographer: Ron Antonelli/Bloomberg

People stand inside the lobby of the JPMorgan Chase & Co. headquarters building on Park... Read More

In the past couple of years, Citigroup Inc. and UBS AG decided to move some employees from their Park Avenue buildings to other Manhattan locations.
The Grand Central submarket without JPMorgan would be 14.7 percent vacant, up from the current 12 percent, according to Cushman data.

Corporate Campus

JPMorgan owns its Park Avenue tower as well as nearby 383 Madison Ave., which the bank inherited when it bought Bear Stearns Cos. in 2008. It also has offices in other buildings in the area, designed as a corporate campus in the early 2000s after Chase Manhattan Corp.’s acquisition of J.P. Morgan & Co.
The bank had sought more than $1 billion in city and state incentives to move to the far west side, a request that New York Mayor Bill de Blasio called a “non-starter.”
JPMorgan’s commitment to its concentration of offices around Grand Central isn’t firm, a person with knowledge of its plans said. While the bank is staying put for now, it still intends to move Manhattan jobs to other places, as it has done recently to Delaware, New Jersey and Brooklyn, said the person, who asked not to be named because the matter is private.
As for Related Cos., principal developer of the Hudson Yards area, Cohen said the company is probably better off without the bank. Finding several smaller tenants would yield more revenue than a single user, he said. JPMorgan had proposed taking about 4 million square feet (372,000 square meters) at the $20 billion project.
It’s unlikely that Related Chairman Stephen Ross has any regrets, Cohen said in a telephone interview. “He already has tremendous momentum over there.”