March 28, 1978, Page 25Buy Reprints
In a new confirmation of the city's role as international financial center,. the First Boston Corporation has signed long‐term lease for expansion in the Wall Street area.
First Boston, a large securities concern that is one of the handful of underwriters for national and worldwide corporations and institutions as well as foreign, state and local governments. will move into he office building called 1 New York Plaza, at the Battery. The move, scheduled to be announced by Mayor Koch, today, is to take place in the summer of 1979.
“Bursting at the seams,” as one spokesman put it, First Boston had actively considered both New Jersey and midtown locations for all or part of its operations a year ago, when it decided to leave the triangular‐shaped office building at 20 Exchange Place.
Instead; it will occupy five floors in 1 New. York Plaza—the 24th through the 28th—with a five‐year option on the 23d floor, In square footage,ihe basic space measurement terminology in real‐estate transactions, the company will occupy 191,000 square feet initially, with an option on 38,000 square feet more.
The 20‐year lease means a long‐term financial commitment of $46 million by First Boston—with annual base rent of something under $10 a square foot—or more than $50 million if the option is exercised.
Its signing earlier this month also was the signal for the conclusion of a longterm mortgage of $70 million on the building’ itself, half from the Bowery Savings Bank and the other half from the Equitable Life.Assurance Society.
First Boston now occupies eight floors, or about 150,000 square feet of space, in 20 Exchange Place, which is’ owned by Citibank. Its office is in the larger, lower floors, which now will become available for expanSionfby the bank itself or other users.
In the last two years, First Boston has been expanding rapidly downtown. It had 635 employees! there in February 1976 and 940 last month. A spokesman said ‐that with the new lease it would he able to handle future expansion.
In recent yers changes in the securities and allied industries have led some securities firms to end or thin out their operations downtown. Last year 19 smaller firms “dissolved.
At the same time, the larger securities firms have been expanding. They generally prefer to remain close to the New York Stock Exchange and other securities markets downtown, and to consolidate operations on larger floors for the sake of efficiency.
Lehman Brothers, for example, signed a long‐term lease in an expansion into 55 Water Street. Earlier Goldman Sachs & Company moved into 55 Broad Street. Salomon Brothers is another tenant in 1 New York Plaza.
The role of the Chase Manhattan Bank was reported to have been crucial in bringing First Boston to 1 New York Plaza. Chase, the largest tenant in the building and also the lender that supplied financing for its construction, agreed to give up one floor it occupied and to make available the 23d floor on option.
A few years ago, one of the large underwriting firms, Morgan Stanley & Company. left downtown for the Exxon Building at 1251 Avenue of the Americas.
In the First Boston transaction, Kenneth D. Laub & Company represented the ownership, a partnership of John P. McGrath and the estate of Sol G. Atlas, and Edmund F. Wagner was the consultant for First Boston.
In the recently published Directory of Manhattan Office Buildings, prepared by Robert F. R. Ballard and published by the McGraw‐Hill Book Company, 1 New York Plaza is described as a 50‐story building with 2.1 million square feet of rentable space, completed in 1968.