Jamie Dimon once joked that a new headquarters is a reason to short the stock, which means betting it falls. He said it at JPMorgan's 2018 investor day, right after the bank announced a new tower. That tower is open now at 270 Park Ave. It's the tallest occupied office building in New York. And by the count of the bank's own real-estate staff, it cost around $6 billion.
The number has moved a lot, Alexander Saeedy reports in the Journal. Early estimates put the building near $3 billion. At the ribbon-cutting last fall, Dimon said he'd told his board it would cost $4 billion to build. The bank has never put a final figure in its filings. The newer $6 billion figure is wider. It adds furnishing and intangible assets to the construction bill. One person familiar with it said the gap includes hundreds of millions in technology, plus artwork and the value of the land. So are the air rights JPMorgan bought from neighbors to build that high. The bank also paid to tear out and rebuild a Long Island Rail Road concourse below, so it could put in the supports.
Spread over about 2.5 million square feet, that's around $2,500 a square foot. The paper says that isn't far off other new Manhattan buildings. Mary Ann Tighe of CBRE said the bank began around 2019, in a very different market, before building costs jumped. One person familiar said the bank will likely save money by moving staff out of rented offices and into a tower it owns. It calls the building “a true physical manifestation of our values.”
The cost-cutter's building
The story lands because of who built it. Dimon made his name cutting costs. After he became an executive at JPMorgan in 2004, one of his first moves was closing the gym at the old headquarters. The new tower has a big gym with Peloton bikes facing Central Park. Art by Maya Lin and Gerhard Richter greets people at the entrances. JPMorgan's expenses are expected to hit some $108 billion this year, among the highest of the big U.S. banks. Analysts have sent the stock down before when the expense forecast came in high. Most of the recent rise has gone to technology, including AI, which Dimon says protects the bank from cyberattacks. On a July earnings call, he argued that some of that spending works like an investment and pays off well.
Our read
For our books this is an Investments/Risk · IN04 story, and a small one. JPMorgan (JPM) is held at weight in 26 books, and nothing was added. The tower was a one-time cost, paid over years of building. The bank expects some $108 billion in expenses this year alone. So the building doesn't change the position, and the expense forecast is the number we watch. The lesson for a household is about budgets. The figure went from $3 billion to $4 billion to about $6 billion. The man in charge is banking's best-known cost-cutter, and he gave his board a number. The full price still came in far higher, because it counted things the first figure left out. The land. The air rights. The technology. The train concourse under the floor.
If you're planning a kitchen remodel, an addition or a new roof this year, that's your 270 Park. Before you sign, read the quote for what isn't in it. Permits. Fixtures. The surprise behind the wall. Then write a contingency line of your own into the budget, and park that money in the cash account before the first hammer swings. Dimon's bank could absorb its surprise. A retirement budget absorbs one less easily. You set the budget before the demolition, not after the invoice.