As part of its ongoing restructuring initiatives,
The Bank of New York Mellon Corporation
) inked an agreement to vend off its One Wall Street headquarter
building to a group led by Macklowe Properties, a New York-based
real estate developer. The deal, valued at $585 million, is
expected to close in third-quarter 2014. However, it is subject to
certain customary closing conditions.
Further, BNY Mellon is on a lookout to lease nearly 400,000 square
feet property in order to shift its current office structure. As
report, the banking major is in talks with
Brookfield Office Properties Inc.
) and contemplating to move into 225 Liberty St. in lower
Manhattan, or 70 Hudson St. in Jersey City.
Jones Lang LaSalle Inc.
), a Chicago-based investment company is serving as BNY Mellon's
CBRE Group, Inc.
), a Los Angeles-based commercial real estate company acted as its
advisor for the office tower sale.
What Prompted the Sale?
The 50-storey skyscraper that was functioning as BNY Mellon's
headquarters since 1998 was not cost effective and hence, it failed
to serve as an efficient work place for the workers. Therefore, the
company's latest decision to shift to a relatively consolidated
office space seems justified.
Moreover, the office tower based in lower Manhattan was acquired by
BNY Mellon back in 1989. Though the exact price of the property at
the time of acquisition is not known, the current valuation of $530
per square foot would likely be well ahead of it. Moreover, the
company's chairman and chief executive officer Gerald L. Hassell,
believes that the deal will result in solid financial gain for BNY
In the present economic scenario with limited opportunities to
enhance the top line, financial organizations are resorting to
aggressive cost cutting measures to aid profitability. Since 2011,
BNY Mellon has an expense-saving program in place which includes
shedding expensive real estate properties. Notably, the company
outpaced the targeted level of $650-$700 million cost saving set
for 2014, in 2013 itself.
BNY Mellon currently carries a Zacks Rank #3 (Hold).
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BANK OF NY MELL (BK): Free Stock Analysis
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