Is JP Morgan thinking of moving back downtown?

In a move quite stunning for how sensible it is, the Port Authority of New York and New Jersey is thinking of selling all or part of the Freedom Tower at the World Trade Center site to developers or private equity operations. That's a great idea: office prices are in the stratosphere right now, and the Port Authority has much better things to do with the cash than have it tied up in office buildings for ever.

The story comes from Alex Frangos and Jennifer Forsyth in the WSJ – and they have an even juicier tidbit as well:

A move on Tower 5 by J.P. Morgan, on the other hand, could take place as soon as a month, though people familiar with the matter stress the firm is also exploring sites in midtown Manhattan or could choose to do nothing.
If a deal is made, J.P. Morgan would purchase a long-term ground lease from the Port Authority for what is known on plans as Tower 5. J.P. Morgan would build and occupy a 57-story, 1.6 million-square-foot office building, housing its trading and analyst operations. Such a move would be a major shot in the arm for the Trade Center site, which has so far failed to land private-sector tenants.

Of course, one of the main reasons that the Trade Center site hasn't landed any private-sector tenants is that it doesn't have any buildings to put them in – besides 7WTC, of course, which, although not technically part of the Trade Center site, is up and running with tenants such as Moody's already signed up.

It's interesting that JP Morgan, which has been scaling back its property exposure of late, would rather build its own skyscraper on a relatively small footprint rather than simply lease space in one of the larger buildings being put up by Larry Silverstein. But banks love to build their own towers, as both Bear Stearns and Morgan Stanley did recently in midtown, and Goldman Sachs did in New Jersey and maybe again next to the Freedom Tower. (Morgan Stanley ended up selling its new tower to Lehman Brothers before it ever moved in.)

Frankly, I think that JP Morgan belongs downtown – its present location in midtown is big and bland and has nothing of the presence that either Chase Manhattan Plaza or 60 Wall Street had. A custom-built new bank tower could really help the neighborhood – and it would finally replace the ugly old Bankers Trust building which is slowly, now, being demolished.

Posted by Felix at 11:07 EST