Morgan Stanley remains confident in New York’s office culture in the new year, taking on one of the biggest leases in the city since the pandemic began.
The investment bank is set to take over approximately 400,000 square feet at 55 East 52nd Street, also known as Park Avenue Plaza, Bloomberg reported. The 15-year lease will replace BlackRock’s headquarters as that business moves to Hudson Yards next year.
Morgan Stanley’s presence in the city is extensive, including headquarters at 1585 Broadway in Times Square. The bank has already leased more than 93,000 square feet in Park Avenue Plaza before its latest deal.
According to Bloomberg, JLL represented Morgan Stanley in lease negotiations, while CBRE represented Fisher Brothers, the building’s owner.
Morgan Stanley’s expansion into the building is a promising sign for the future of ownership. Nearly half of the 45-story office tower in Midtown East is leased to BlackRock and insurance giant Aon, both of which are slated to leave in April 2023.
Asset management firm Jennison Associates has agreed to lease 119,000 square feet, according to Morningstar DBRS. The lease, which was signed last February for $93 per square foot, will not expire until 2040.
Aon’s 209,000 square foot space, meanwhile, is largely sublet to financial firms Evercore and General Atlantic. Both companies have agreements in place to become tenants after Aon leaves.
As of October 1, the building was 99% let to 11 tenants. The building is owned by a joint venture between Fisher Brothers and Zhang Xin and Pan Shiyi. The project recently received a $575 million CMBS debt package to sell as bonds to investors; Interestingly, the loan was initiated by Morgan Stanley.
Morgan Stanley CEO Jamie Gorman previously made headlines when he said in June 2021 that he would be “very disappointed” if employees weren’t back in the office by Labor Day. Gorman has since backtracked on his comments amid an increase in cases linked to the Omicron variant of the coronavirus.
The additional terms of Morgan Stanley’s new lease are unclear. Last year’s biggest office lease in Manhattan by money was signed by MSG Entertainment at 2 Penn Plaza, which is paying $951 million over 20 years for 428,000 square feet in a Vornado building whose expansion is planned.
[Bloomberg] — HoldenWalter Warner