Curiouser and curiouser. Perhaps when the dust settles from the JP Morgan Chase/Bear Stears deal we will look back on it primarily as a smart property deal. JP Morgan made sure that it not only got Bear Stearns’ head office at 383 Madison as part of the takeover but can buy it even if the takeover falls through.
Jamie Dimon, JP Morgan’s chief executive, apparently wants to reverse the plan to move JP Morgan’s investment banking and trading operations into a new building on the former World Trade Center site. As Felix Salmon notes this is a service to architecture since its planned building looked ghastly.
Mr Dimon cut a mean deal, albeit assisted by the Federal Reserve putting pressure on Bear’s management to sell out. The Journal points out that his option to buy 383 Madison for $1.1bn even if the takeover is voted down by Bear shareholders looks like a good alternative since it could be worth $1.4bn (at least at current Manhattan prices).
Apart from that, it is a blow to the reconsolidation of Wall Street downtown. Goldman Sachs and JP Morgan were both due to be near the WTC site and this deal leaves Goldman looking a little lonely, although it got a lot of money from New York to move there.
At least one of the other towers on the WTC site has room for a bank trading floor but none of the other Wall Street firms has so far signed up. With Mr Dimon sticking to midtown and prospects for commercial property in Manhattan uncertain at best, the prospects of Wall Street heading back downtown look slimmer.
