J.P. Morgan Chase Commits to Building 2.5 Million-SF Headquarters in NYC (Update)
Bank is Self-Financing 70-Story, Ground-Up Construction Accommodating About 15,000 Employees
J.P. Morgan Chase made waves this morning with the announcement that the global banker will build a new 2.5 million-square-foot headquarters at 270 Park Ave. in New York City.
Still in progress, according to sources, is the feat of garnering approvals for a planned 70-story, LEED-certified commercial tower borne from the site of its former headquarters. The razing and redevelopment of its new building will produce an estimated 8,000 construction jobs.
J.P. Morgan already has cost-run rates on the project, and will finance the build itself. Construction is expected to begin in 2019 and take five years to finish. In the interim, it has signed leases for space to house employees at 245 Park Ave., 277 Park Ave. and 237 Park Ave., according to sources with knowledge of the deals.
UPDATE: On March 2, the bank signed a 10-year lease for 436,905 square feet across 16 floors of L&L Holding’s 390 Madison, bringing the building to full occupancy before its summer open.
CoStar Group has learned that in repositioning 270 Park, J.P. Morgan needed up to 668,000 square feet of development rights transferred. Corporate litigation firm Fried Frank negotiated the contract for that transfer. The law firm has counseled J.P. Morgan on its HQ redevelopment and leasing strategy to accommodate its headcount for the project’s duration.
Upon completion, nearly 15,000 employees will work from the new tower, replacing what J.P. Morgan calls in a release, "an outdated facility" that houses just 3,500 current employees.
The bank’s preference was to stay in the location in which it was, but the company could not build higher without the Midtown East rezoning. The Department of City Planning’s Midtown East rezoning targets a 73-block radius around Grand Central station, providing incentives for new development and energy efficiency.
With this deal, the financial institution seeks to achieve a modern office space and create an asset with modern infrastructure, in a sea of aging buildings. It could not provide comment on the approximate cost of the project.
"With a new headquarters at 270 Park Avenue, we are recommitting ourselves to New York City while also ensuring that we operate in a highly efficient and world-class environment for the 21st century. We look forward to working constructively and collaboratively with Mayor Bill de Blasio, Governor Andrew Cuomo, Deputy Mayor Alicia Glen, the New York City Council, and other key City and State officials on this important project," CEO Jamie Dimon said in a release.
J.P. Morgan Chase must purchase additional development rights from surrounding properties to ensure its tower climbs. According to corporate releases on the deal, any such transactions in the new East Midtown subdistrict require the seller of the air rights to pay the City a minimum contribution of $61.49 per square foot, providing funding for improvements to the neighborhood’s public realm.
The financial conglomerate has not finalized renderings for its new HQ conceptualization. Built in 1958, the current Chase Building at 270 Park Ave., located between 47th and 48th Streets, is fully leased. It stands 52 stories tall and comprises 1.36 million square feet of 4-Star office space.
"J.P. Morgan Chase’s commitment to build their new, state-of-the-art corporate headquarters and support thousands of jobs here in New York is proof that our economic development strategies are successful," noted New York State Governor Andrew Cuomo.