Even as it develops a gleaming skyscraper across the street, JPMorgan Chase is planning to polish up its soon-to-be-former headquarters along Manhattan's Madison Avenue to accommodate the banking giant's growing workforce.
Alongside recent news calling employees back to a full, five-day work schedule, the New York-based company is preparing to renovate its 383 Madison Ave. tower, adding to the firm's office investments both in the city and elsewhere across the country. The 1.2 million-square-foot tower is within steps of JPMorgan's future headquarters at 270 Park Ave., a more than $3 billion development that's on track for completion later this year.
“With more than 17,500 employees working in Manhattan across a number of corporate office locations, we are always reviewing our long-term real estate options in Manhattan, especially as we move toward opening our new global headquarters at 270 Park,” a JPMorgan spokesperson said in an emailed statement to CoStar News.
JPMorgan, the largest bank in the United States, is expected to kick off renovations on the Madison Avenue property once work on the 70-story, 2.5 million-square-foot headquarters project is complete.
The bank has made a number of significant investments in its physical real estate since it broke ground on its Park Avenue headquarters in early 2021, underscoring the importance JPMorgan has long placed on in-person work.
Earlier this month it told all employees they'd be required to return to an office five days a week, marking the end of a pandemic-era policy that allowed some to work on a hybrid schedule.
The escalated policy, which takes effect in March, has meant the bank is scrambling to boost capacity across its portfolio of offices to accommodate the full return of all of its employees. JPMorgan's operating committee said in a recent memo, earlier reported by Bloomberg, that employees will be notified before the end of the month whether certain offices have the space necessary for everyone to begin to fill them back up.
“We know that a lot has changed in our workplaces since returning to the office after the pandemic and recognize that it will take us some time to get all of our locations ready to accommodate a five-day-a-week schedule,” JPMorgan said in the memo. “We know that some of you prefer a hybrid schedule and respectfully understand that not everyone will agree with this decision. We think it is the best way to run the company.”
Full-scale return
That commitment to physical office space has rippled across the country as JPMorgan has signed several large renewal deals, expanded regional offices and spent hundreds of millions of dollars to acquire more property.
Last year it closed a roughly $320.2 million deal with developer Hines to acquire 250 Park Ave., an office tower across the street from its headquarters development. It signed major new and renewal agreements in Southern California, New York City, Dallas and New Jersey, according to CoStar data, and is currently finalizing a deal to expand its longtime San Francisco hub in the JPMorgan Chase Building at 560 Mission St.
If realized, that agreement would boost the bank's footprint in the 31-story tower up to about 280,000 square feet, an increase of about 30%.
From corporate giants to smaller professional services firms, employers across the country are stepping up their in-person requirements in an attempt to move past the pandemic-related shift toward increased flexible work arrangements. Office market stakeholders point to the escalated mandates, many of which take effect this year, as a signal that demand for office space will be on the rebound after years of depressed leasing activity.
Large employers such as Amazon, Starbucks, AT&T, Southwest Airlines and Walmart have recently stepped up their in-person requirements, and some employers are now demanding workers commute to an office all five days of the workweek.
Escalated mandates have fueled optimism among national office landlords looking to retain their portfolio occupancy as tenants slashed real estate to both trim costs and adjust to flexible, post-pandemic work policies.
The combination of depressed demand, stagnant leasing and ongoing flexible work has helped push the national office vacancy rate to a record high of about 14%, according to CoStar data. Tenants have collectively handed back roughly 210 million square feet of office space since the start of 2020 with tepid demand expected to prolong any effort to revert to pre-pandemic levels of occupancy.
Growing presence
For JPMorgan, the push to boost in-person attendance is critical given its string of large investments to expand its office real estate portfolio.
The bank is one of New York City's largest employers and was one of the first to mandate a return to the office for its U.S. workforce in 2021, albeit on a hybrid schedule.
With its new headquarters nearing the finish line and its planned renovations along Madison Avenue, JPMorgan is also among a cohort of companies aiming to make the office a commute-worthy destination. At 270 Park Ave., for example, the skyscraper's roughly 14,000 employees are set to have access to a slew of amenities such as outdoor lounges, a fitness center, a meditation room and an upscale food hall.
Employees at the soon-to-be-renovated 383 Madison Ave. tower — a property JPMorgan acquired through its takeover of Bear Stearns at the height of the Great Recession — could get a similar boost of perks. The bank has brought on Foster and Partners, the same design firm as its Park Avenue headquarters project, to spearhead the renovation.
The bank declined to provide additional comments or details about its Madison Avenue plans.
JPMorgan occupies upward of 27 million square feet of office space around the world, according to CoStar data, a footprint spread across more than 700 outposts.