J.P. Morgan (JPM) Shopping Its Various Office Buildings
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J.P. Morgan (NYSE: JPM) is looking to unload unused space after its acquisitions of Bear Stearns and Washington Mutual.
The Journal reported that J.P. Morgan is marketing 23 office properties in an effort to shed excess space. But selling real estate in the worst market in decades means that JPM will likely receive drastically reduced prices from only a few years ago.
The portfolio of properties for sale, with a combined 7.1 million square feet of space, includes four notable towers: One Chase Manhattan Plaza, near Wall Street; Four New York Plaza, also in the Financial District; the former headquarters of Washington Mutual in a downtown Seattle skyscraper that also houses the city's art museum; and a landmarked 1929 Art Deco building in Houston, the former headquarters of Texas Commerce Bank.
The portfolio is said to be the largest single portfolio of office properties to hit the market this year and could raise more than $1 billion.
J.P. Morgan already has moved many employees of its investment bank into Bear's former headquarters in Midtown Manhattan, which is located around the corner from J.P. Morgan's corporate offices on Park Avenue.
It won't be easy for JP Morgan to sell such a large portfolio of properties in this environment. Values for office space have plummeted as corporations have cut staff. Moreover, it is very difficult to get any financing, there fewer deals are getting done.
Just eight office buildings were sold in Manhattan in the first half of 2009, at an average price of $470 a square foot, according to Real Capital Analytics. In the same period last year, 43 properties changed hands in Manhattan at an average price of $877 a square foot.
Several New York developers have offered bids of more than $290 million to own HSBC's New York City headquarters building at 452 Fifth Ave on the condition that the bank has agreed to lease virtually the entire 850,000-square-foot skyscraper for the next 18 months, according to information obtained by the WSJ. After that the bank will lease more than half the building for the next 10 years.
So far, J.P. Morgan hasn't explicitly offered to finance the purchases, according to people familiar with the matter, forcing buyers to hunt for credit elsewhere.
Real-estate investment-banking firm Houlihan Lokey is representing J.P. Morgan in the sale.
The Journal reported that J.P. Morgan is marketing 23 office properties in an effort to shed excess space. But selling real estate in the worst market in decades means that JPM will likely receive drastically reduced prices from only a few years ago.
The portfolio of properties for sale, with a combined 7.1 million square feet of space, includes four notable towers: One Chase Manhattan Plaza, near Wall Street; Four New York Plaza, also in the Financial District; the former headquarters of Washington Mutual in a downtown Seattle skyscraper that also houses the city's art museum; and a landmarked 1929 Art Deco building in Houston, the former headquarters of Texas Commerce Bank.
The portfolio is said to be the largest single portfolio of office properties to hit the market this year and could raise more than $1 billion.
J.P. Morgan already has moved many employees of its investment bank into Bear's former headquarters in Midtown Manhattan, which is located around the corner from J.P. Morgan's corporate offices on Park Avenue.
It won't be easy for JP Morgan to sell such a large portfolio of properties in this environment. Values for office space have plummeted as corporations have cut staff. Moreover, it is very difficult to get any financing, there fewer deals are getting done.
Just eight office buildings were sold in Manhattan in the first half of 2009, at an average price of $470 a square foot, according to Real Capital Analytics. In the same period last year, 43 properties changed hands in Manhattan at an average price of $877 a square foot.
Several New York developers have offered bids of more than $290 million to own HSBC's New York City headquarters building at 452 Fifth Ave on the condition that the bank has agreed to lease virtually the entire 850,000-square-foot skyscraper for the next 18 months, according to information obtained by the WSJ. After that the bank will lease more than half the building for the next 10 years.
So far, J.P. Morgan hasn't explicitly offered to finance the purchases, according to people familiar with the matter, forcing buyers to hunt for credit elsewhere.
Real-estate investment-banking firm Houlihan Lokey is representing J.P. Morgan in the sale.
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