JPMorgan Chase is spending an estimated $3 billion to erect a latest headquarters skyscraper at 270 Park Ave. But based on a top analyst within the bank’s own asset and wealth management division, corporations should think twice about investing an excessive amount of in Recent York City.
The Big Apple ranks behind 18 other US cities — including such second-tier markets as Boston, Seattle and even lowly Boise, Idaho — in a bombshell “forensic evaluation” of the towns’ economic and real estate prospects by Michael Cembalest, chairman of market and investment strategy for JPMorgan Asset & Wealth Management.
Recent York bested only shooting-gallery Chicago, depressed Detroit and empty-offices capital San Francisco in an aggregate rating of the cities’ post-COVID 19 conditions — akin to strength of downtown recovery, office emptiness, household tax rates, out-migration, violent crime and municipal fiscal health.
Cembalest — a native Recent Yorker who’s written his division’s “Eye on the Market” reports since 2005 — did the study on the request of a client CEO.
He beneficial that his clients treat Recent York “the way in which an asset manager might treat a megacap stock in a diversified portfolio … the risks argue against an excessive amount of concentration for corporate or real estate entities.”
NYC’s office emptiness of 18% is the best because the early Nineties, based on the study.Getty Images
He cites Gotham’s “unique benefits” of its overall size, business-sector diversification, global financial-sector dominance, total employment and lower serious crime rate than in other cities (“which sometimes comes as a surprise.”)
Despite these strengths, Recent York City “is dragged down by a weak economic recovery since 2019, structural problems related to its business conditions and poor fiscal health.”
He specifically notes:
- Current mass-transit use at 73% of 2019 levels is “unsustainable given required capital and operating costs.”
- Office emptiness of 18% is the best because the early Nineties.
- Office to residential conversions “are unlikely to materially reduce the stock of underutilized office space given cost and complexity.”
- “Zoning restrictions are particularly burdensome at a time when flexibility is paramount in a post-COVID world.”
- “The asylum influx threatens to substantially impair the town’s financial situation” at a time when it must substantially re-invest” in infrastructure and housing.
The Big Apple ranks behind 18 other US cities, including Boise, Idaho.The Washington Post via Getty Images
Asked whether the bank had any regrets about how much it’s spending on its latest headquarters in light of Cembalest’s findings, JPMorgan spokesman Michael Fusco said:
“Recent York City has been our home for greater than 200 years and we contribute significantly to the local economy as one in every of the town’s largest employers. We’re constructing for future generations of staff and making a long-term investment in Recent York.”
