Morgan Stanley, 6th-largest U.S. bank by assets, signed a lease for almost 1.2 million square feet (111,480 square meters) of space at 1 New York Plaza in lower Manhattan.  It currently occupies about 816,000 square feet at the building, which means it will take an additional 337,000 sf, in a lease deal that would run through 2029. Morgan Stanley is making a big commitment - in fact, the agreement is the largest office lease for a single building in the city since 2008, according to the New York-based landlord.  What also makes the deal so striking is that it follows a weak quarter for office leasing, as Wall Street firms cut jobs and delayed decisions on space.

"For a major financial institution to make a decision of this scale is a big positive, for the market and for us.  There are a number of large tenants moving toward making large space decisions.  A 15-year-plus commitment is a good signal to the market." -- Dennis Friedrich, Brookfield CIO.

Consolidating Space. One New York Plaza, at the foot of Manhattan near Battery Park, has 2.6 million square feet of space and is one of New York’s largest office buildings.  Morgan Stanley, based at 1585 Broadway in midtown Manhattan, will consolidate operations currently in Jersey City, NJ; Brooklyn; and Midtown to the tower, Mr. Friedrich said.  The additional 337,000 became vacant when Goldman Sachs Group Inc., moved into its new headquarters on West Street. Outside Manhattan, Morgan Stanley currently has offices at 1 Pierrepont Plaza in downtown Brooklyn, and at Harborside Financial Center in Jersey City.  Many Manhattan-based financial companies pushed back-office operations into locations across the Hudson and East rivers in the 1980s and 1990s to save money.  The lease signing at 1 New York Plaza "indicates demand for functional space in a transportation-centric, amenity-rich location at a low cost," according to an analyst with Stifel Nicolaus & Co.  [Bloomberg, 4/17/12]