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Bear Stearns May Leave Brooklyn


July 30, 2002

Bear Stearns Cos., the sixth-biggest U.S. securities firm, may move 1,500 employees from Brooklyn to New Jersey, said the property broker helping the securities firm with its search.

Bears Stearns' 320,000-square-foot lease at the MetroTech office complex in Downtown Brooklyn expires in 2004. The landlord, Forest City Ratner, has offered to renew the lease at a rent Bear Stearns thinks is too high, said the broker, David Levinson of Insignia/ESG. Forest City executives didn't return calls.

"New Jersey is all over us," said Levinson, adding that the firm is also looking at space in lower Manhattan and Long Island City. New Jersey landlords "are making a lot of attractive offers," said Levinson.

Morgan Stanley, Goldman Sachs Group Inc., Fidelity Investments and other companies are moving thousands of workers out of New York City to cut costs and disperse staff after the Sept. 11 terrorist attacks. The defections are hurting New York's tax revenue, and will contribute, along with a slumping stock market and a drop in Wall Street profits, to a $6 billion budget deficit through 2005, city officials have said.

New York "is committed to encouraging an employer as important as Bear Stearns to stay in Brooklyn and to remain in New York City," said Lynn Rasic, a spokeswoman for the Economic Development Corp., a city agency.

Of the 62,467 jobs that have left downtown since Sept. 11, 17,575 have gone to New Jersey, 37,687 have gone to midtown and 7,205 have gone elsewhere, according to TenantWise.com, a property brokerage.

Bear Stearns keeps administrative, securities processing and accounting functions at MetroTech. Forest City, developer of the 8-million-square-foot complex, made an "over-market offer" to keep Bear Stearns, he said. Bear Stearns spokesman Russell Sherman declined to comment.

Levinson wouldn't disclose Forest City's offer or what Bear Stearns is paying in rent. In November, Empire Blue Cross and Blue Shield agreed to pay $36 a foot for about the same amount of space at MetroTech as occupied by Bear Stearns, while receiving $14 million in tax and energy incentives from the city.

2002 Bloomberg L.P. All rights reserved.

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