Bank of America has decided to sell its 450-acre office complex in Hopewell and then lease back the property in a continuing effort to cut costs. In February, the bank announced it was looking to sell off most of its property holdings except for its headquarters in North Carolina and offices in New York City.
“Commercial real estate ownership is not a core business for Bank of America, which is why we’ve decided to sell our interests in the Hopewell campus,” says bank spokesman T.J. Crawford.
Chief Executive Officer Brian T. Moynihan has said he is evaluating the bank’s real estate needs as he eliminates at least 30,000 positions in an effort to cut some $8 billion in annual expenses.
According to Crawford, the sale and lease-back deal in Hopewell will not translate into an “immediate impact to employees.” The 12-building campus is fully occupied by Merrill Lynch, Bank of America’s wealth management division. Under the sale and lease-back plan, the bank would sign a lease for at least 10 years for the entire complex.
Industry experts believe the property could sell for around $400 million, which would make the transaction the biggest office sale in New Jersey history, according to Real Estate Alert (www.realert.com).
A deal at that amount would exceed the $377.5 million paid in October for the 36-story, 1.1 million-square-foot Newport Tower in Jersey City, which is currently the highest price on record for a New Jersey office property.
Cushman & Wakefield and Bank of America’s in-house brokerage are sharing the Hopewell listing. In recent months, the bank has been selling properties in its portfolio to raise capital, including the Hearst Tower in Charlotte, NC, for more than $250 million, and 100 Federal Street in Boston for $615 million.
In most cases the bank has given the listings to the firms that already lease and manage the properties — Cushman, CBRE, or Jones Lang LaSalle. Bank of America’s in-house brokerage shares the listing in each case and is overseeing the sales process. The outside brokers are conducting the marketing campaigns and receiving full brokerage commissions.
Built in the late 1990s, the 1.8 million-square-foot complex was acquired by Bank of America when it acquired Merrill in 2009. In 2011, the company told U.S. 1 that about 6,000 workers were employed there.
The property was originally developed to service Merrill Lynch’s customers via phone operations and other back office operations. Bank of America purchased the brokerage in 2008 after it fell on hard times as a result of the financial crisis.
“The company continues to sell non-core business units and assets that don’t support its strategy, thereby strengthening the balance sheet and improving capital and liquidity,” said a statement from the bank.