UBS Sub-Leasing Park Avenue Office Space to Cut Property Costs

The Swiss banking giant, UBS, is reportedly cutting down on its leased office space in the 299 Park Avenue Building, a 42-story office tower located in Manhattan, New York. The move comes as the company is looking to cut down property costs.

The bank initially owned around 49 percent stake in the building but sold it off in 2010 for around $180 million. It has been leasing space in the tower since then. It occupies around two-thirds of the building and will be sub-leasing a large part of the space.

According to Bloomberg, In April, UBS listed around 382,000 square feet of space in the building. It is seeking to sublease the offices for around $65 per square feet for space on floors 27 to 32 and $75 per square feet for floors 35 to 41. However, it will be retaining around 130,000 square feet for its own use. It intends to keep at least five floors in the building until its lease expires in 2018.

The bank will be moving most of its operations from 299 Park Avenue to 1285 Avenue of the Americas, a 1.7 million square feet skyscraper located just six blocks away from the former. The company has around 93,000 square feet of office space in the Americas skyscraper. In late 2012, the bank signed a lease extension for its space that will continue until 2020, reports Businessweek.

The 299 Park Avenue building was designed by famous design firm, Emery Roth and Sons,  and opened in 1967. The 42 floor structure spans a height of 175 meters and is a major office building of the Manhattan area. It serves as the New York headquarters of UBS.

The Swiss bank is cutting down on excess overhead costs as it restores its profits. Last week, UBS reported its first-quarter earnings to be around $1.06 billion.

"UBS has excess capacity, like all financial firms right now. UBS is being extremely proactive in managing its bottom line. That's why they're doing this," Robert Alexander, New York Tristate regional Chairman for the CBRE Group, a real estate firm which is representing UBS in the lease deal, said in a statement.

Meanwhile, news of the Swiss banking giant cutting 10,000 jobs from its wealth management and investment banking sectors worldwide have been doing the rounds since October, 2012. In April 2013, it cut around 10 investment banking positions in Dubai.

Read the UBS report on the Switzerland real estate market, here.