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JPMC "Doubles Down" for New HQ

270 Park Ave - Exterior

After seriously considering a move to trendy Hudson Yards, JP Morgan Chase has announced that it will "stay-put" (in corporate real estate jargon) and completely redevelop its HQ at 270 Park Avenue - a complex project that will nearly double their office space, but will involve taking interim "swing space" in nearby Park Avenue buildings.

JPMC intends to tear-down its existing 52-story / 700-foot HQ tower and replace it with a new 70-story / 1,200-foot version, which could approximately double the footprint - in the range of 1.7 to 2.5 million square feet. According to city officials, the demolition and construction work would likely begin in 2019, and complete around 2024. This would be the first project to take advantage of the Midtown East Rezoning plan, and Mayor Bill DiBlasio is celebrating the announcement as a win for his legacy.

The current 270 Park Ave was built by Skidmore, Owings, and Merrill in 1961. It served as the HQ for Union Carbide (now a subsidiary of Down) until they moved to Danbury, CT in 1983. Next the building became HQ for Manufacturer's Hanover Trust, which then merged with Chemical Bank in 1991. Chemical purchased Chase in 1996; the combined company retained the Chase name, but kept Chemical's HQ.

A number of development steps are still ahead - not the least of which is that JPMC will need to buy unused "air rights" from neighboring property owners. The company is also reportedly in negotiations for the necessary swing space with landlords at 390 Madison (story here), as well as 237, 245, and 277 Park Ave.

It is considered best practice avoid definitive confirmations and media announcements of a major project until it is "de-risked" as much as possible - especially securing of development rights and entitlements, as well as consents and option agreements with neighboring property owners, and crucial swing space if necessary. All of those items have a magic tendency of becoming more expensive once the need is absolute. But in a project this significant and a city like NYC, its not very realistic to de-risk all of those items without publicly acknowledging the project.

The professional team - designers, engineers, construction managers, etc. - has not been announced.

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