Goldman Sachs Unit to Leave 534,000-SF Downtown Space for Jersey City

NEW YORK CITY-GlobeSt.com has received confirmation from One New York Plaza owner TrizecHahn that Goldman Sachs will shift part of its operations from Lower Manhattan to Jersey City. But while the financial services giant plans to move its equities unit to the 1.2 million-sf office tower it is constructing across the river, there has been no indication that the firm intends to give up space in the Downtown building.

“We have been informed by Goldman Sachs, confirming what they had apparently put into an internal note last week–that they’re going to be moving their equity people to Jersey City in a couple of years,” says Rick Matthews, senior vice president of public relations for TrizecHahn. “However, Goldman has not indicated that they’re going to leave the space and we are in discussions regarding [a lease extension on] that portion of their space.” The equities group occupies 12 floors of direct space at the 50-story One New York Plaza building. “We would prefer that they stay, but whether it’s with Goldman Sachs or with someone else, we would expect some rental uplift,” Matthews tells GlobeSt.com.

Other Goldman divisions are also housed in the 2.5 million-sf tower at One Water St. The firm leases another 43,000-sf full floor of direct space until 2010 and subleases 120,000 sf on three floors from Prudential securities. Goldman Sachs also leases space at One Liberty Plaza, 10 Hanover Square, 32 Old Slip, 180 Maiden Lane and 125 Broad St.

A report published yesterday cited a leaked Jan. 24 Goldman Sachs corporate memo said to have been composed by the firm’s co-chief operating officers of US equities Eric Mindich and Eric Schwartz and European equities head Wiet Pot. The memo reportedly says the decision to move was sparked by space needs resulting from Goldman’s 2000 acquisition of securities firm Spear Leeds & Kellogg LP. It also is said to reflect a post-Sept. 11 decision to decentralize core operations beyond Downtown Manhattan.

The equity unit was chosen for redeployment because the lease on its 400,000-sf space is scheduled to roll over in 2004, sooner than any of the firm’s other Lower Manhattan commitments. The 42-story 30 Hudson St. building is scheduled for delivery in 2003. Rising more than 800 feet, it will be the Garden State’s tallest office building. A spokesman for Goldman Sachs declined requests for comment by GlobeSt.com.

According to Gerry J. Vanella, president of CoreNet’s New York Chapter–CoreNet is the newly formed hybrid organization produced by the merger of Nacore and IDRC–reports of the move’s negative implications for Lower Manhattan are unfounded, even if Goldman Sachs decides to give back the space. “One New York Plaza is a great building and I think it’s going to provide some space for New York companies that want to be Downtown,” Vanella tells GlobeSt.com. “Somebody will take that space; it’s great space.” Vanella is also vice president of global real estate and client services for JP Morgan Chase, which just yesterday moved house from 55 Water St. to the newly constructed Newport Center, also located in Jersey City. Chase is a former owner of One New York Plaza.

Cushman & Wakefield president of US operations Bruce Mosler says moves such as the Goldman Sachs relocation are evolutionary rather than symptomatic of companies’ hesitation to do business here following the World Trade Center attacks. “Diversification was happening long before Sept. 11,” Mosler says. “Goldman Sachs and other companies continue to have their core in New York and this is merely a continuation of a trend. This is not a blow to Downtown because Goldman Sachs is retaining offices there and there is no doubt of their commitment to New York.