Thursday 29 September 2016

All change in New York as NYMEX building set for new tenant in KCG

David Levitt

Published 19/07/2015 | 02:30

KCG Holdings is in talks to take almost half the space at the New York Mercantile Exchange building at Brookfield Place
KCG Holdings is in talks to take almost half the space at the New York Mercantile Exchange building at Brookfield Place

KCG Holdings is in talks to take almost half the space at the New York Mercantile Exchange building at Brookfield Place, according to people with knowledge of the negotiations.

  • Go To

KCG, a brokerage and automated trader based across the Hudson River in Jersey City, New Jersey, would take more than 200,000 sq ft in the 509,000-sq-ft building at the end of Vesey Street. CME Group which shut many of its Nymex trading pits at the property last week, had planned to cut its presence in half at the building by late this year.

Landing KCG, formed from the merger of Knight Capital Group. and Getco, would fill most of the pending vacancy that Brookfield Office Properties took on when it bought the 15-storey building from CME in 2013. The landlord, now part of Brookfield Property Partners, paid $200m for the property at 1 North End Ave., knowing that the exchange planned to scale back.

A KCG spokeswoman, declined to comment on the talks, as did a Brookfield spokeswoman.

For a firm that specializes in securities trading, the Nymex space is close to ideal, the person said. It has wiring and electrical capacity conducive to the type of trading KCG engages in. Also, the Hudson River esplanade and a NY Waterway ferry terminal are right outside the building, which is near the PATH train to New Jersey and 11 New York subway lines.

KCG is in talks to sublease office space at 545 Washington Boulevard. in Jersey City to JPMorgan Chase. The bank is planning to shift about 2,150 information jobs to New Jersey from three New York City locations, a person with knowledge of the matter said last week.

KCG has about 270,000 sq ft at 545 Washington, which is part of the LeFrak Organization's Newport complex.

Andrew Gray, a JPMorgan spokesman, said the company remains in negotiations and declined further comment. LeFrak spokeswoman Elizabeth Walden said the company had no comment.

KCG has already vacated two floors totaling 78,000 sq ft at Newport, which are now being marketed by brokerage Jones Lang LaSalle, according to CoStar, which tracks office leasing. The brokerage's lease on its offices runs until October 2021.

Brookfield has relied on "the strength of its operating platform" to cope with that vacancy while also addressing about 3 million square feet left by Merrill Lynch in Brookfield Place, said John Bejjani, an analyst at research firm Green Street Advisors. More than 90pc of the space left by Bank of America, which bought Merrill, has been re-leased.

"The improvement in Manhattan office leasing demand certainly helped, but Brookfield's team rightly met the market's economic terms on new deals and now has a more manageable level of vacancy to work with and an improved negotiating position," Bejjani said in an e-mail. (Bloomberg)

Sunday Indo Business

Read More

Promoted articles

Editors Choice

Also in Business