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


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.

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