Bank of New York Mellon Plans to Move Its Corporate Headquarters in Lower Manhattan -- Update

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 [e-mail] and Keiko Morris at [e-mail]

(END) Dow Jones Newswires

January 31, 2018 18:57 ET (23:57 GMT)

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