JPMorgan Chase is one of a number of companies that is looking forward to seeing its employees return to the office following the COVID-19 pandemic. However, even the United States’ largest bank in terms of assets acknowledges that its commercial real estate footprint will look different going forward, Commercial Observer reports. The company, which is the largest private office space tenant in Manhattan, cites the pandemic and other factors as why it expects major changes to its CRE footprint. JPMorgan Chase still plans to complete and occupy its 2.5 million square foot headquarters at 270 Park Avenue in Manhattan, however.
“Remote work will change how we manage our real estate,” JPMorgan Chase Chairman and Chief Executive Jamie Dimon said in his annual message to shareholders.
Planned changes for JPMorgan’s CRE footprint
JPMorgan will quickly move to “a more open seating arrangement” for office and shared space, like conference rooms, according to Dimon. He also acknowledged that the bank would use digital tools to handle the move. Dimon forecasted that for every 100 employees, the bank might need just 60 seats on average.
“This will significantly reduce our need for real estate,” he said.
Dimon didn’t say if the bank was changing to a “hybrid” work model, however, according to Commercial Observer. He did say it was unlikely that the company would go 100% remote though. Dimon expects 10% of employees at most would work remotely full-time and that would be for specific roles.
“In all cases, these decisions depend upon what is optimal for our company and clients,” Dimon said. “We will extensively monitor and analyze outcomes to ensure this is the case. Of course we will also continue to reopen following health authority and government guidelines and our own established processes.”
Most JPMorgan employees can plan to return to their offices full-time at some point. The bank sent a memo to employees last month that stated it was hopeful to reopen most, if not all of its offices during the spring and summer. The company based the decision on the COVID-19 vaccine rollout, but noted its reopening would depend on government health guidelines.
How JPMorgan Chase’s CRE plans impact NYC
The rest of the real estate industry, especially in Manhattan, will keep a close eye on JPMorgan’s property needs, Commercial Observer reports. The bank currently occupies about 5 million square feet of CRE in Manhattan. It made waves in the CRE industry when it announced it was looking to sublet approximately 700,000 square feet at 4 New York Plaza and more than 100,000 square feet at 5 Manhattan West in Hudson Yards. As Dimon pointed out in his shareholder message, the bank’s 2.5 million square foot headquarters is still in its plans—the building would more than offset the 800,000 square feet the company is looking to shed.
“We still intend to build our new headquarters in New York City,” Dimon said in the portion of his shareholders letter that focused on the real estate fallout due to the COVID-19 pandemic and increase of remote work. “We’ll of course consolidate more employees into this building, which will house between 12,000 and 14,000 employees. We’re extremely excited about the building’s public spaces, state-of-the-art technology and health and wellness amenities among many other features. It’s the best location in the one of the world’s greatest cities.”
Joe Dyton can be reached at firstname.lastname@example.org.