KPMG LLP plans to move its headquarters to Midtown Manhattan’s West Side by the end of 2025, reducing its office space by over 40%.
The new offices will provide the Big Four firm’s more than 5,500 New York-based partners and professionals an improved workplace experience outfitted with the latest technology. KPMG currently occupies approximately 800,000 square feet of space at 345 Park Avenue, where its worldwide headquarters are located, as well as 560 Lexington Avenue and 1350 Sixth Avenue. In the relocated headquarters, KPMG will lease approximately 450,000 square feet across 12 floors in the new 58-story Two Manhattan West building, Construction on the energy-efficient building is expected to be completed by Brookfield Properties in early 2023, and KPMG is planning to move in late 2025 when its current leases expire.
The move, announced Tuesday, comes as office space has remained empty across Manhattan and other cities across the country as a result of the pandemic that prompted employees to start working from home. Many KPMG employees have been working remotely or in hybrid mode since 2020.
“We’ve been in New York City for 125 years,” said KPMG New York office managing partner and market hub leader Yesenia Scheker Izquierdo. “Our firm actually started right here in New York City, so it’s a very important market for us and it’s our largest. What really prompted the move was the expiration of our leases. We’re in three different buildings in Manhattan, where we have about 5,500 of our professionals. Given the complexities around having three different leases and the expirations, we wanted to get ahead of that and really think about where we wanted to be.”
The firm sees the move as a way to renew its commitment to the city and bring its employees together. “We wanted to find a place where we can bring our 5,500 people together into one place,” said Izquierdo. “For us, recommitting to New York was very important, especially through some of the difficulties the city has had over COVID.”
Financial details were not disclosed, but Izquierdo said it’s the largest transaction this year from a square footage perspective in New York.
KPMG started by looking at the inventory of available office space in New York City and surveyed its employees to better understand what they were looking for, especially from a transportation perspective. The building is connected to Penn Station’s recently opened Moynihan Train Hall via a protected crosswalk and offers direct access to the High Line, the Hudson Yards Shed building, Madison Square Garden and the Penn district. It’s also close to the popular Chelsea Piers fitness complex and easily accessible from other parts of the city.
“We really wanted to be a place where there was a terrific workplace environment,” said Izquierdo. “The building has great amenities. It’s near a transportation hub and a hospitable place for people to visit where there’s a lot of good day and nighttime life for people. The other really important factor for us was sustainability, so we were looking for a building where we had ESG considerations.”
Designed by Skidmore, Owings & Merrill, the building’s developers plan to earn LEED Gold designation through an energy-efficient design, optimization of electrical service performance, sustainable materials, maximization of natural light, stormwater harvesting and recycling, and high indoor air quality.
“It really narrowed down our search to just a bit more than a handful of buildings, and we focused on those in particular,” said Izquierdo. “We toured and surveyed them and ranked them against the experience level they would provide to our employees and colleagues, and the technical considerations. At the end of the day, this really emerged as a unanimous choice for us.”
Many KPMG employees have been working remotely or in a hybrid environment, and the move will enable the firm to reduce its footprint while saving money when its current leases expire.
“The sustainability aspect was important, but we were really looking at how much space we needed,” said Izquierdo. “We have a hybrid work model. We call it ‘flex with purpose.’ It provides all of our professionals with flexibility to gather in our offices or work remotely at home. There’s an expectation that we want our people to gather together some parts of their week, whether they come into the office or a client site. We’re looking at how we’re going to design the amount of collaboration space we’ll need and how to use our space going forward, to take into account the virtual world and remote access, the way we’re working today. It’s ensuring that we really have a workspace where people can work in both the virtual and hybrid environment.”
As one sign of such a workplace, in June KPMG launched a collaboration hub in the metaverse where U.S. and Canadian employees can interact as avatars in a virtual office (see story).
“The workplace is evolving and the technology is evolving,” said Izquierdo. “We have the benefit of the next year or two as we look at the advancements that we’ve seen just through the pandemic and beyond and how that has accelerated. I can’t even imagine what the next potential innovation may be. But we have that time right now to really think about how we design our space, how we’re going to incorporate these types of new technologies, and how we’re going to use them for our people and to work.”