NEW YORK (CNNfn) - In one of the first tangible signs that financial firms are hesitant to return to New York's Financial District, one influential company is considering moving part of its operations out of the city and another may be moving away from downtown Manhattan, according to a published report Friday.|
Morgan Stanley (MWD: Research, Estimates) is considering selling its interest in a 38-floor building it has been constructing near Times Square since 1999, a move the company was not thinking about before the Sept. 11 attacks, according to the Wall Street Journal, citing people familiar with the matter.
Lehman Brothers (LEH: down $0.97 to $58.95, Research, Estimates) has emerged as a possible bidder for the property, as company executives toured the facility this week, the paper reported. The Sept. 11 attacks displaced Lehman from its headquarters in the World Financial Center, which is adjacent to the World Trade Center.
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Morgan Stanley's possible sale of the building comes as financial firms no longer find it crucial to be located in the midst of Manhattan's Financial District.
"In our modern, connected world, there are fewer reasons for close proximity for those involved in the financial markets," Wharton finance professor Jeremy Siegel told the Journal.
Morgan Stanley was the World Trade Center's largest tenant with a total of 27 floors in the complex, and lost six employees in the attacks. For many of the firm's employees, the Sept. 11 incident was not their first brush with terrorism. Dean Witter, which merged with Morgan Stanley, was a tenant in the center when a bomb went off in the towers in 1993, killing six people, none of whom were Dean Witter employees.
Morgan Stanley relocated most of its employees housed in the World Trade Center to offices in Jersey City, N.J., New York's Brooklyn borough, and additional offices in Manhattan.
The decision to construct the building was made by Morgan's former chief executive, John Mack, who is now the chief executive of Credit Suisse First Boston. People close to the situation told the paper Mack's departure makes the proposed sale easier for the company to digest.
A spokesman for Lehman Brothers said Thursday the firm plans to return to its space in the World Financial Center "if it can," the paper reported. Meanwhile, Lehman is working from offices in Jersey City and midtown Manhattan.
Shares of Morgan Stanley closed unchanged Thursday at $49.89. Lehman Brothers shares finished closed 97 cents lower to $58.95.