Wall Street investment banking firm BNY Mellon, which is looking to trim 700,000 square feet of space from its New York City real estate footprint, reached an agreement to sell its One Wall Street office building in lower Manhattan for $585 million to a joint venture led by Macklowe Properties. The building sale could be the first step in the bank moving to more efficient space.
At 1.166 million square feet, the 50-story One Wall Street property is selling for about $500 per square foot. Gross asking rents for 3- to 5-star properties in Manhattan’s Financial District are currently about $43.70 per square foot.
BNY Mellon has occupied the building since 1989 when The Bank of New York acquired the Irving Trust Co. The banking company moved its headquarters there from 48 Wall St. in 1998.
"We're pleased to have reached this agreement. Once finalized, it will advance our plan to consolidate office space in New York City, lead to a more functional and efficient work environment for our employees," said Gerald L. Hassell, chairman and CEO of BNY Mellon. "We expect to announce our decision for new leased space in the New York region in the next two months."
Last month, the company told investors that the banking company was taking aggressive action in virtually every expense category. Some of the cost-cutting moves included in-sourcing application development, reducing storage costs and consolidating its real estate footprint
“There are going to be some cost associated with this consolidation as we reposition our staff, but we expect gains to more than offset these cost when we sell 1 Wall Street building,” said BNY Mellon CFO Thomas P. (Todd) Gibbons.
The building sale was brokered by CBRE and is expected to be completed in the third quarter of 2014, subject to customary closing conditions.
In addition to One Wall Street, BNY Mellon owns the 23-story, 1.1 million-square-foot 101 Barclay St. building in downtown Manhattan, and leases the land on which that building sits under a ground lease expiring in 2080.
It also leases 313,000 square feet of space in the Met Life Building at 200 Park Ave. and 318,000 square feet of space in an office building at 2 Hanson Place in Brooklyn.
At a number of the locations, BNY Mellon said it is not currently occupying all of the space under its control by subleasing some of its excess space.