Accounting firm KPMG will cut more than 40% of its New York City office footprint and relocate its U.S. headquarters to Brookfield Properties’ 2 Manhattan West, the firm announced. KPMG inked a 20-year deal for 456,000 square feet across 12 floors of the under-construction Hudson Yards skyscraper to consolidate its 800,000 square feet, which is spread across 345 Park Avenue, 560 Lexington Avenue and 1350 Avenue of the Americas. This the largest lease so far this year in the city. KPMG declined to comment on the asking rent.
The accounting firm will join two other tenants in the under-construction 2 Manhattan West: law firms Clifford Chance and Cravath, Swaine & Moore. KPMG’s move is another blow to New York City’s office market, which has recently seen several major firms reveal plans to jettison unused space. Amazon and Meta announced they would slow their expansion plans, and Yelp said it would close its Flatiron District offices as it shifts to a remote work model.
Remote work has pushed other companies to cut back too. A July survey from flexible workspace software provider Robin found that nearly half of 250 companies contacted would cut their office space in the next year, and a Federal Reserve Bank of New York survey found that 16% of service firms had already reduced their office footprints after adopting a hybrid work model. Meanwhile, Manhattan saw a record-high office availability rate of 18.3% in the second quarter as leasing remained slow, according to a Newmark report.