Bank of America has selected both Jones Lang LaSalle and Cushman & Wakefield to help it sort out and then execute its real estate strategy in the city, a process likely to include decisions on what presence Merrill Lynch will continue to have in lower Manhattan.
Bank of America had issued a request for proposal to the city’s major brokerage firms in recent months to compete for the assignment and named the winners in the past few days according to sources.
Sources said that splitting the work between two firms is indicative of the bank’s intent to keep operations in the Financial District, a neighborhood whose health many real estate experts feared could suffer if Merrill withdrew leaving large tracts of vacancy in its wake.
According to those familiar with the assignment, JLL will handle the work in lower Manhattan while Cushman & Wakefield will arrange the firm’s midtown portfolio of space.
Bank of America acquired Merrill Lynch in an emergency acquisition facilitated by the U.S. government during the dizzying depths of the financial crisis in 2008, shortly after Lehman Brothers collapsed. Merrill, which appeared to be teetering itself on insolvency at the time, weathered the recession under Bank of America but has appeared to shrink.
The company is the largest tenant in the World Financial Center, a four building complex west of the World Trade Center site, occupying all of the roughly two million square foot building 4 World Financial Center and hundreds of thousands of more square feet in 2 World Financial Center.
In recent years, Merrill had subleased blocks of its space in 2 WFC. But after its seismic problems and subsequent acquisition, the bank has quietly let it be known among brokers that it is willing to give up floors at 4 WFC as well, an indication according to leasing executives familiar with the off-market offering that the firm was downsizing and that Bank of Americas was relocating portions of Merrill’s operations to midtown, including its new headquarters tower One Bryant Park and the nearby 660,000 square foot office building that it leases entirely, 114 West 47th Street.
Hiring the real estate services firm JLL to focus specifically on its portfolio downtown is an indication according to some brokers that Merrill will keep a presence in the neighborhood. Some real estate experts explained that a plan to bring all of the bank’s operations to midtown would call for a unified real estate strategy better executed by one advisor instead of two.
Leading the JLL team is one of the company’s executives Michael Shenot, who, prior to joining JLL, worked in house at Merrill Lynch in the investment bank’s corporate real estate department.
Tara Stacom, a top leasing executive at C&W, is said to be heading the team that will handle Bank of America’s midtown advisory work. Bank of America occupies a little more than half of the 2.1 million square foot One Bryant Park, a skyscraper it co-developed with the Durst Organization, the family owned real estate firm that also is the landlord of 114 West 47th Street.
Although downtown has appeared to take center stage in Bank of America’s real estate decision making, questions remain what the bank will do in midtown. It’s not clear if there is enough space in One Bryant Park and 114 West 47th Street to house all of the operations that Bank of America wants in the area. Another question is whether the bank will continue to occupy 114 West 47th Street, known as the U.S. Trust Building. Some brokers say that it would take significant capital to update that building’s infrastructure enough to meet the increasingly hi-tech requirements that banks have for their facilities.
Some brokers say that one of the decisions Bank of America could be contemplating is a move to a higher end building, with some speculating that Four Times Square could be a possibility after it was reported in recent months that that building’s largest tenant, Conde Nast, could be considering a move to One World Trade Center. Four Times Square is also owned by the Durst Organization and is adjacent to One Bryant Park, providing the kind of proximity that large tenants often seek in ancillary locations.
The Durst Organization is a finalist in a bid to operate One World Trade Center. If the company wins that contract, brokers say it could unite control of all the necessary pieces to create such a large-scale real estate shuffling under one owner.
Neither JLL nor C&W would comment for this article.