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Asset Manager AllianceBernstein Pulling Up Stakes, Moving HQ from Manhattan to Nashville

Financial Firm Relocating More Than 1,000 Including Executive Staff in Cost-Cutting Move
May 2, 2018
Global asset management firm AllianceBernstein LP confirmed this morning that it will relocate its longtime Manhattan corporate headquarters to Nashville, opting to choose the low-cost area over access to talent in one of the world's largest financial capitals.

The firm said it will move approximately 1,050 jobs currently based in the New York metro area to Tennessee's capital beginning later this year. It expects the transition to take several years to complete. The firm employs nearly 3,500 employees in 22 countries and has approximately $549 billion in assets under management.

The move to Nashville comes amid an ongoing cost-cutting initiative at the firm - an effort in which it is not alone among its financial services colleagues in New York City.

AllianceBernstein's new Nashville headquarters will house its finance, IT, operations, legal, compliance, internal audit, human capital, and sales and marketing operations. It has not yet revealed the address of its new location.

The firm said it will continue to maintain a New York City location for its portfolio management, sell-side research and trading, and New York-based private wealth management businesses.

It plans to spend more than $70 million to establish its corporate headquarters in Nashville, and expects to incur transitional costs for the first couple of years before realizing cost savings benefits.

"We see Nashville as a game-changer in terms of our ability to source, develop and retain talent, provide a high quality of life for our employees, enhance our competitive edge in an increasingly challenging marketplace," Seth P. Bernstein, president and CEO of AllianceBernstein, said in a prepared statement.

The company acknowledged the move carries significant risk in terms of being able to attract and retain key personnel outside of New York. But the firm said it is willing to run that risk in exchange for the long-term costs savings, and believes it may be able to entice plenty of specialized, technical and investment personnel by pitching quality of life and a more family-friendly market.

AllianceBernstein said it began exploring several U.S. cities for a second principal U.S. location last year. It had whittled the list down to two undisclosed locations. Now we know one was Nashville, and the other likely San Antonio, TX, where it already leases 92,067 square feet of office space.

"We believe a second principal location will afford us the opportunity to provide an improved quality of life alternative for our employees, enable us to attract and recruit new talented employees to a highly desirable location while improving the long-term cost structure of the firm," the firm disclosed in its 2017 annual report last month.

Relocation was not the only operational cost-cutting initiative it began last year. It reduced its headcount in its finance and administrative services departments by about 3% and also began to sublease loads of unused office space.

AllianceBernstein currently leases about 992,000 square feet at its principal executive offices at 1345 Avenue of the Americas under a lease expiring in 2024. It only occupies about 523,000 square feet of space and has sublet (or is seeking to sublet) the rest.

It also leases about 229,000 square feet of space at One North Lexington in White Plains, NY, under a lease expiring in 2021. At this location, it currently occupies about 69,000 square feet and has the remainder up for sublease.

In San Antonio, it only occupies about 59,000 square feet of space and has sublet the remainder.

The move by the money-management giant to Nashville is part of a broader cost-cutting effort across the industry that for years has been under pressure from emerging technology-based and other low-cost investing options.

Last summer, Barclays Capital purchased The Crossings at Jefferson Park in Whippany, NJ. The park totals 525,000 square feet of Class A office space.

Barclays is moving 329 employees from its offices at 1301 Avenue of the Americas where it leases about 295,000 square feet. Another 112 employees will be moved from its main headquarters at 745 Seventh Ave., where it leases more than 1 million square feet.



Mark Heschmeyer, Senior News Reporter  CoStar Group   

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