J.P. Morgan Chase & Co. is more than tripling its office space on Midtown Manhattan's far West Side in a revamped building that has gone from being one of the city's homeliest to a gleaming structure with all the features in vogue among media and tech companies.
The bank has closed on a 15-year lease deal for about 300,000 square feet at Five Manhattan West, expanding office space for its digital teams from 125,000 square feet to 428,000 square feet, according to owner Brookfield Property Partners L.P.
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J.P. Morgan, which initially took space there in late 2014, has had success recruiting and keeping workers on its digital teams over the years, prompting its decision to take more space, bank executives said.
"You can see the workforce, you can feel the vibe of what's going on, and that makes all the difference," said David Arena, head of J.P. Morgan's global real estate. "It's very distinct from an office tower geometrically and experientially."
Ric Clark, chairman of Brookfield Property Partners, saw the potential when he first toured the building years ago, when the concrete Brutalist structure had been painted beige and clad with brown-metal siding. "It was a concrete bunker affectionately known as the elephant's foot," he said.
J.P. Morgan eventually expects to have 2,000 to 2,500 people at Manhattan West. The bank has one floor and is acquiring three more at the top of the 16-story building. The floor at the very top, which was once an ice-skating rink, is a double-height space with huge skylights and has a mezzanine, Mr. Arena said.
The building was one of the last pieces of the assemblage now being developed into Brookfield's Manhattan West project, which also includes two other planned office buildings, a 2-acre plaza and gardens, a retail building and a 62-story residential tower, which recently opened.
Brookfield acquired Five Manhattan West in 2011, when the real-estate market and the far West Side were still struggling. Brookfield saw an opportunity to reskin the building with glass and take advantage of appealing features such as its high ceilings.
Brookfield underwrote the more than $300 million renovation, expecting rents 30% higher than existing prices -- but today the company is getting rents twice as high, in the low $90-a-square-foot range, Mr. Clark said.
The building has attracted other large tenants such as digital advertising firm R/GA and Whole Foods Market Inc.
Five Manhattan West's renovation, designed by Joshua Prince-Ramus of REX, replaced the concrete exterior with glass, revamped former loading docks into retail space, and added six elevators. About 375,000 square feet hasn't yet been leased at the building.
Brookfield's One Manhattan West, a 67-story office tower now rising, has drawn names such as law firm Skadden, Arps, Slate, Meagher & Flom LLP and the National Hockey League. And the entire neighborhood, especially the larger Hudson Yards project by Related Cos. and Oxford Properties Group, have drawn marquee names from Manhattan's other submarkets.
"Overall, there is tremendous demand for the project, I think, in part because it's clear that a neighborhood is being created," Mr. Clark said.
(END) Dow Jones Newswires
June 01, 2017 18:55 ET (22:55 GMT)