JP Morgan Snubs Silverstein in Move Back Downtown

This has taken rather longer than expected, but it seems that JP Morgan is finally very close to inking a deal to move back downtown, where it belongs. The WSJ's Alex Frangos reports that the bank's new skyscraper, on the site of the not-yet-demolished Deutsche Bank tower, will be 50 stories and 1.3 million square feet – a step down from the 57 stories and 1.6 million square feet that were being mooted back in February.

It's good that JP Morgan is moving back to the financial district, although I daresay it will continue to have a substantial presence on Park Avenue. It's certainly good that JP Morgan isn't moving to Stamford, not that it was ever really going to. But here's the most interesting part of Frangos's story:

People familiar with the matter say J.P. Morgan spent over a month negotiating with Mr. Silverstein about moving into his buildings, but the two sides were unable to come to terms.

Silverstein's towers have larger footprints than the Tower 5 site where JP Morgan is going to build, which make them more natural homes for banks who want huge trading floors. It's interesting that Silverstein was willing to let JP Morgan fall through his fingers: there aren't that many banks who want to move their headquarters to a new building in downtown New York, and he's going to need to find three. With Goldman Sachs and JP Morgan building new headquarters already, and Lehman Brothers and Bear Stearns happily ensconced in their own new buildings in midtown, it's not clear who Silverstein is hoping to attract.