While negotiations on how the United Kingdom will execute its exit from the European Union are ongoing, at least one truth is already evident: London will be losing banking jobs.
At the annual meeting of the Securities Industry and Financial Markets Association, Wall Street's trade group, several executives from British banking and economic development organizations made clear their belief that London's loss will be, mostly, New York's gain.
Banking jobs migrating from London to New York "will be a gradual process as institution after institution decides their European cost bases are unsustainable given the revenues they're getting," City of London Corp. Director Of Economic Development Damian Nussbaum said at the meeting, Crain's New York Business reports.
Estimates peg job losses due to Brexit anywhere from 5,000 to 25,000, and while several banking institutions are eyeing Paris, Frankfurt and Amsterdam as a new base of European operations, English is not the first language in any of those cities.
"New York will become the path of least resistance," Peterson Institute for International Economics Senior Policy Fellow Jacob Funk Kierkegaard said, according to Crain's.
If even half of those roughly 20,000 banking jobs find their way from London to New York, it would equate to hundreds of thousands of square feet of office demand from companies that tend to lease trophy office assets. Deutsche Bank, for example, signed a headquarters lease in Midtown Manhattan at the Time Warner Center in May, where rents are reportedly close to $100/SF. Wells Fargo and BlackRock are among the firms moving to Hudson Yards, where office rents are comfortably north of $100/SF.
Brexit is set to take effect March 29.
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