Although no terms were disclosed, Morgan Stanley paid $42 million for the 725,000-sf property, which sits on 107 acres, according to papers the firm filed with the Westchester County Industrial Development Agency seeking tax breaks in relation to its purchase and planned capital improvement program at the 2000 Westchester Ave. property.

The transaction was originally scheduled to close a week ago, according to real estate sources.

Brokers in the transaction were John McCarthy, a principal of McCarthy O'Callaghan Inc., which represented Morgan Stanley and Senior Managing Director William Cuddy of Insignia/ESG's Westchester/Connecticut office and Steven Bardsely, managing director of Insignia/ESG Capital Advisors who represented Chevron/Texaco.

The closing came a little more than three weeks after the financial services firm received preliminary approval to structure a straight lease transaction on property with the Westchester County Industrial Development Agency. The IDA deal, once finalized, will save Morgan Stanley approximately $8.4 million in sales taxes.

Morgan Stanley plans to utilize the 2000 Westchester Ave., building as a data center and backup trading facility and will house as many as 2,000 employees there. However, the company plans to undertake a major capital improvement project at the building before taking occupancy. The company expects to invest a total of $227 million at the Chevron/Texaco property, which includes acquisition and construction costs as well as the purchase of equipment and other ancillary expenses. The company hopes to take occupancy sometime next year, according to Bret Gallaway, a company spokesman.

The 2000 Westchester Ave., headquarters building became available due to last year's merger of Texaco and Chevron. The complex had been home to Texaco since 1977 and served as the oil company's corporate headquarters. However, the new combined company now has its corporate headquarters in San Francisco. Chevron/Texaco officials said that the company will retain approximately 80,000 sf of space at the building for the next year. The only other tenant at the property is Atlas Air, which relocated its corporate headquarters from Golden, Colo., to 120,000 sf of space at the property in 2001. The company had signed a long-term lease that expires in 2012 at the building, which houses approximately 300 employees. The firm also has two, five-year renewable options on its agreement with the former Texaco Inc.

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Morgan Stanley Closes on Chevron/Texaco HQ

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