Lehman Brothers to Remain in New York with Purchase of Morgan Stanley's New Office Tower

Business Wire ,  Oct 8, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 8, 2001

Morgan Stanley (NYSE: MWD) and Lehman Brothers (NYSE: LEH) announced today their agreement for Lehman Brothers to purchase Morgan Stanley's new one million-square-foot office tower at 745 Seventh Avenue in New York, thereby keeping more than 5,000 jobs in New York City.

The 32-story tower, located in Times Square one block from Morgan Stanley's headquarters building at 1585 Broadway, has been under construction since 1999 and should be ready for occupancy later this year. Terms of the transaction were not disclosed.

"This agreement reaffirms our commitment to New York and is a win-win-win solution to a difficult office space problem facing both of our firms and the city," said Lehman Brothers Chairman and Chief Executive Officer Richard S. Fuld, Jr. "With a new, state-of-the-art headquarters building in Manhattan built specifically for investment banking and capital markets activities, we can relocate our operations quickly and efficiently."

"Our agreement is in the spirit of Wall Street's commitment to work together in the wake of the tragic events of September 11," said Morgan Stanley Chairman and Chief Executive Officer Philip J. Purcell. "Morgan Stanley will continue to have a major presence in New York City and will be better positioned from a business continuity standpoint."

Business continuity planning is a key reason for Morgan Stanley's decision. With primary space at 1585 Broadway and 745 Seventh Avenue, the firm's trading and backup facilities would be concentrated in two buildings within one city block that are dependant on the same transportation and power infrastructures.

Morgan Stanley's global headquarters is in the 1.4 million-square-foot building it owns at 1585 Broadway. The firm recently secured new office space on Third Avenue in Manhattan, and it will continue to lease significant additional space at 750 Seventh Avenue, 1633 Broadway, Pierrepont Plaza in Brooklyn, and in several retail branch locations throughout the city.

Morgan Stanley co-developed 745 Seventh Avenue with The Rockefeller Group, a leading owner, developer and manager of corporate real estate. The Rockefeller Group's ownership and development position in the building is unchanged as a result of Morgan Stanley's sale to Lehman Brothers. A subsidiary of The Rockefeller Group, Rockefeller Group Development Corporation, will manage the building upon its completion later this year.

Lehman Brothers' global headquarters were at the World Financial Center in downtown Manhattan, which was evacuated after the September 11 attacks on the World Trade Center. The firm remains committed to the downtown Manhattan area.

Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private equity, and private client services. The Firm is headquartered in New York, London, and Tokyo and operates in a network of offices around the world. For further information about Lehman Brothers' services, products, and recruitment opportunities, visit its web site at www.lehman.com.

Morgan Stanley is a global financial services firm and a market leader in securities, asset management and credit services. With more than 700 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

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    CONTACT: Morgan Stanley
             Bret Gallaway, 212/762-7843
             or
             Lehman Brothers
             Bill Ahearn, 201/524-2241
             or
             The Rockefeller Group
             Vince Silvestri, 212/282-2122

    KEYWORD: NEW YORK
    INDUSTRY KEYWORD: BANKING
    SOURCE: Morgan Stanley