Bank of New York Mellon Plans to Move Its Corporate Headquarters in Lower Manhattan -- Update
January 31 2018 - 7:12PM
Dow Jones News
By Justin Baer and Keiko Morris
Bank of New York Mellon Corp. is moving its global headquarters
for the second time in less than four years.
The custody bank plans to relocate all of its employees from
Brookfield Place, the downtown office complex formerly known as the
World Financial Center, to a nearby building it owns at 101 Barclay
St. The move consolidates BNY Mellon's presence in New York,
bringing together some 4,500 employees under one roof, a spokesman
for the bank said.
"As part of our multiyear corporate real estate strategy, we
have continued to review our occupancy needs in Lower Manhattan,
and there are real benefits for us bringing together the teams
currently at 225 Liberty with our colleagues in 101 Barclay,"
Michael Santomassimo, BNY Mellon's finance chief, wrote in a memo
to employees.
BNY Mellon signed a 20-year lease at 225 Liberty St., one of the
buildings within Brookfield Place, in 2014. The agreement, which
covered 350,000 square feet, began the following January.
The bank plans to sublet the office space, a person familiar
with the company's plans said.
A spokesman for Brookfield Property Partners, the building's
owner, declined to comment.
BNY Mellon is shedding office space as its new chief executive,
Charles Scharf, reviews the bank's businesses and operations. Mr.
Scharf, a former protégé to JPMorgan Chase & Co.'s James Dimon,
arrived last year expected to modernize the custody bank, find new
sources of revenue growth and trim costs.
Earlier this month, BNY Mellon reported it had taken a
fourth-quarter charge to absorb severance costs related to the
review. The bank didn't say how many jobs would be affected by
possible cuts.
The 225 Liberty St. offices house BNY Mellon's executive team,
along with support functions such as its finance and legal
departments. It's part of a large complex with 8 million square
feet of office space. Ninety-seven percent is leased, Brookfield
said.
The move, set to begin this summer, will fill vacant space at
101 Barclay. The bank intends to redesign and modernize its space,
Mr. Santomassimo wrote. Those changes will include open floor plans
without offices, he wrote.
BNY Mellon sold its former Wall Street headquarters in 2014, and
had weighed several New York and New Jersey locations before
striking a deal with Brookfield.
New York made a big push to keep the bank, which was founded in
1784 by Alexander Hamilton. The state agreed to provide $20 million
in funding for redevelopment of the Barclay Street offices and a
build-out of the newly leased space at 225 Liberty St., according
to the state's economic development agency. The incentives included
a $5 million grant and $15 million in state capital funds. BNY
Mellon in turn agreed to invest $200 million and maintain 5,700
jobs in New York City, including 3,935 jobs at the two lower
Manhattan locations.
The company will be able to receive these incentives if it meets
the investment and job requirements for either location.
The consolidation likely won't have a big impact on the downtown
Manhattan office market and Brookfield, said Jeffrey Peck, vice
chairman for real estate services firm Savills Studley.
"Brookfield has a great credit tenant on the hook for the lease
for the long term," Mr. Peck said. "There has been good demand
downtown, specifically at Brookfield Place and the World Trade
Center site."
Write to Justin Baer at justin.baer@wsj.com and Keiko Morris at
Keiko.Morris@wsj.com
(END) Dow Jones Newswires
January 31, 2018 18:57 ET (23:57 GMT)
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