Chase Planning to Renovate NY Tower with Eye on Sale
Who says banks are nervous Nellies about commercial real estate these days? Not Chase Manhattan. The New York bank has reaffirmed its plan to spend $100 million to renovate its One New York Plaza office tower that overlooks New York Harbor.
The redevelopment plan, to be unveiled at a press luncheon on Wednesday, includes renovations to the lobby, plaza, and retail concourse; restoration of windows; and computerization of the dispatch system for the building's 40 elevators. It could cost more than $100 million, according to market sources.
"We have to bring the building into the '90s. That's what all our advisers tell us," said George Scandalios, senior vice president of administrative service at Chase, which has planned the renovation since acquiring the building under a lease option in 1989.
Eventual Sale in Mind
The bank spent big when it paid $140 million for the building in 1989, saying it would improve the property and eventually sell it for $700 million. At the time, market sources said a $360 million price would be realistic, and the market has since deteriorated.
"That's still our agenda," Mr. Scandalios said of the long-range plan to sell.
He acknowledged that the soft market for space will make it more challenging to lease the building, but said the bank is hoping the market will have recovered in the two to three years it will take to complete the renovations.
The bank occupies about 1.1 million square feet in the building, but plans to vacate most or all of that space when new quarters in Brooklyn are ready in 1993. Chase rents about four million square feet in the city.
Leasing Strategy Has Worked
Edward S. Gordon & Co. is development manager and leasing agent. Mitch Rudin, senior managing director for Edward S. Gordon, said that although new construction in Manhattan is not viable, several buildings, including the former J.C. Penney headquarters, have been leased successfully after renovations.
Chase will have to find new tenants for about 1.65 million of the 2.4 million square feet of space in the 50-story building.