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From left: Cushman & Wakefield’s Doug Harmon and Adam Spies; American Express CEO Stephen Squeri; and 200 Vesey Street (Getty Images, Cushman & Wakefield, Brookfield Properties, Manhattan College)
American Express has hired Cushman & Wakefield to weigh its office options as the financial giant ponders its footprint in Manhattan and beyond. A vast amount of prime space is at stake, much of it at Brookfield Property Partners’ 200 Vesey Street.
Sources told The Real Deal that American Express is looking at about 1 million square feet needed primarily in New York although some could be located in cheaper cities where some of its remote workforce has moved during the pandemic.
The company has been at 200 Vesey Street, the massive Battery Park City building at Brookfield Place, since that project was planned by Olympia & York in the 1980s as the World Financial Center.
But the blue-chip firm’s offices there are now 40 years old — although some were redone after 9/11 — and need a major refresher to attract and retain talent, not to mention get employees to come to work. Amex is competing with tech companies and other financial firms that have moved to modern towers replete with shared spaces rather than warrens of cubicles.
Cushman & Wakefield’s marching orders are to study the benefits of a sale, sale leaseback, relocation, partial relocation or even a bifurcation of its offices and then, presumably, to oversee the leasing.
“Cushman & Wakefield was hired to explore the value of the building and with that comes potentially a leasing assignment,” said one real estate executive.
With Brookfield the likely buyer, the brokerage’s job is to drum up offers by a suitable partner that Brookfield would have to either beat or live with.
If American Express sells, it could lease back the building and renovate in place or relocate to another — likely new — property. It could even sublease another company’s space and later return to its own or a new building.
The possibility of signing an established anchor tenant is an opportunity for developers looking to finance office projects.
“Silverstein must be drooling,” an industry insider said of Larry Silverstein, who needs a large commitment from a tenant to get his 2 World Trade Center back on track. “It would be the best site for Amex because the employees are already used to the area.”
The series of events that brought American Express to this point trace back to 1982, when it announced it would lease space at Olympia & York’s future World Financial Center. The next year, American Express decided it wanted instead to own its headquarters there, and cut a deal with Olympia & York.
The financial firm bought the ground lease from Battery Park City for the 2.2 million square-foot building, 3 World Financial Center, which was designed by Cesar Pelli.
At the same time, Olympia & York bought American Express’ then-headquarters at 125 Broad Street for $160 million and leased it back to Amex until the latter’s new Battery Park City building was finished. Upon its completion in 1986, American Express and its then-subsidiary Lehman Bros. paid Olympia & York $478 million. (Lehman was spun off in 1992.)
When Olympia & York later went bankrupt, its executives, including Ric Clark, formed Brookfield Financial Properties and took over the World Financial Center project, which was eventually renamed Brookfield Place.
After the 54-story, pyramid-topped tower on Vesey Street was severely damaged on Sept. 11, 2001, Lehman moved uptown and sold its half of the building to Brookfield Financial Properties, which had succeeded to the ownership of the majority of the Financial Center.
American Express previously sold the master lease for the street-level and mezzanine retail spaces to Brookfield Properties, which owns all the other retail space and majority of the towers. The Battery Park City ground leases don’t expire until 2069.
The companies either declined comment or did not immediately return requests for comment.
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