745 Seventh Avenue (also known as the Lehman Brothers Building and Barclays Building) is a , 38-story skyscraper in the Midtown Manhattan neighborhood of New York City, New York. Designed by Kohn Pedersen Fox and originally built in 2001 for financial services firm Morgan Stanley, it was instead purchased by competing firm Lehman Brothers and served as Lehman's headquarters until the bank's collapse in 2008. The building has since served as the headquarters of Barclays' investment banking division.
The building occupies the western end of a block bounded by Seventh Avenue, 49th Street, Sixth Avenue, and 50th Street. It is made of steel, granite, and glass and is topped by a glass parapet. The building also features of screen displays incorporated into the facade of its third through fifth stories. The building is bounded to the east by a public plaza running through the block from 49th to 50th Street, and underground passageways connect the building to the New York City Subway's 49th Street station and the Rockefeller Center's underground mall. It has a floor area of .
Site
745 Seventh Avenue is in the Times Square neighborhood in Midtown Manhattan, New York City, United States. It is located just north of the actual intersection known as Times Square and occupies the western part of the block bounded by 50th Street to the north, 49th Street to the south, Seventh Avenue to the west, and Sixth Avenue to the east. The lot covers an area of with a frontage of along Seventh Avenue and a depth of . The building shares the block with 1251 Avenue of the Americas to the east. Other neighboring buildings include 750 Seventh Avenue to the west, the Winter Garden Theatre to the northwest, The Michelangelo to the north, 1251 Avenue of the Americas to the northeast, and 1221 Avenue of the Americas to the southeast.
The site was once home to the Brass Rail, a four-floor restaurant and tavern with a cocktail lounge. The restaurant originally opened as a sandwich shop during the prohibition era and grew to have a seating capacity of more than 1,000. The eastern end of the site was also home to the Embassy 49th Street Theatre, which first opened in 1914. The theater was developed and managed by actor-producer Charles Hopkins and had a seating capacity of approximately 300. It screened British and foreign films early in its lifetime before later becoming a pornographic theater, serving as the location for the premiere of Deep Throat in 1972. The theater was demolished in 1987.
History Initial development plans In late 1986, the property was owned by the Rockefeller Group, a real estate development company in charge of developing the western blocks of Rockefeller Center. As the real estate economy was booming, the company developed plans for a new building on the property. By 1989, the property was largely an empty lot, with the exception of a small plaza called Exxon Park occupying the easternmost section and a small four-story brick building facing 49th Street.
In 1989, the Rockefeller Group announced plans to build a 55-story office building, then called Rockefeller Plaza West, as an expansion of the Rockefeller Center complex. The proposal, designed by Kohn Pedersen Fox, included a rehearsal studio, a restaurant and cabaret, and additional retail space, as well as below-ground connections to the Rockefeller Center concourse and surrounding subway lines. It would have had a total of of floor space, made possible by purchasing air rights from older buildings in Rockefeller Center, which were then also owned by the Rockefeller Group. To purchase the air rights, the developers applied for a special permit under New York City Zoning Resolution § 74-79, which allowed a developer with a "chain of ownership" over multiple contiguous properties to transfer air rights from one of their properties to another.
The building's design was well received by critics. It featured a limestone and glass facade with stainless steel ornamentations, drawing comparisons to the design of the center's older buildings and contrasting it with the monolithic design of the center's more recent buildings. Paul Goldberger wrote in The New York Times that the building "does not look like the RCA Building and it does not look like the Exxon Building, either, yet it looks capable of sitting comfortably beside both." The design won a citation in the Progressive Architecture magazine.
The proposal was approved by the Landmarks Preservation Commission and Board of Estimate in May 1990, and work to clear the site began soon after. The building was expected to begin construction in 1991, take three years to build, and cost in "the half-billion dollar range." Shortly after work began, however, the project became involved in disputes over development rights, and after the economy went into recession, the project was scrapped, with the air rights transfer being abandoned. In 1994, Rockefeller Group received permission from the city to turn the site into a parking lot until an anchor tenant was found for the development. The parking lot had 200 spaces.
Modern development
Morgan Stanley agreement As the city's office market began experiencing a resurgence in 1997, 745 Seventh Avenue was one of only four major sites available for development in Midtown. Rockefeller Group began negotiating with various potential tenants in seeking a renewed development on the site. Several firms expressed interest in occupying most or all of the Rockefeller West site, including Morgan Stanley, which already occupied space at 1585 Broadway one block away and 750 Seventh Avenue across the street. At the time, the site was still being used as a parking lot.
Financial services company Bear Stearns was among the larger companies negotiating a deal; its lease at 245 Park Avenue was set to expire in 2002, and the building required major renovations if the company chose to stay there. Bear Stearns sought co-ownership of the development and required large trading floors at the base of the building which would require a partial redesign of the initial 55-story proposal. At the time Rockefeller Group also negotiated the possibility of a smaller building for other tenants like Reuters. These negotiations ultimately failed, however, and after further negotiations with Guardian Life Insurance also failed, Rockefeller Group began negotiations with Morgan Stanley in January 1998. The two companies discussed the development for 11 months, with negotiations almost breaking down in October, temporarily leading the developers to seek PricewaterhouseCoopers as a tenant before Morgan Stanley resumed discussions.
Morgan Stanley signed a letter of intent in August 1998, expressing its interest in taking over the Rockefeller West site. In November 1998, Morgan Stanley and Rockefeller Group finalized negotiations and signed a deal to begin working on a new development at the site. Kohn Pedersen Fox was once again placed in charge of the design. Under the arrangement, Rockefeller Group would continue to own the land, while Morgan Stanley would own the building. In exchange, Morgan Stanley would pay ground rent for the land for 30 years, after which Morgan Stanley and Rockefeller Group would each gain 50% ownership of both the building and the underlying land. Morgan Stanley intended to use the building to supplement its headquarters at 1585 Broadway, desiring to keep its workforce concentrated in one area as part of a "Midtown urban campus."
Construction By March 1999, the parking lot on the site was about to be cleared. In addition, Tishman Construction was hired as the general contractor. Tishman subcontracted the electrical work to several firms; the electrical contract was delayed due to a shortage of skilled electricians, who were simultaneously working on several other towers nearby, such as 1540 Broadway and 5 Times Square. The project was given a "super-fast-track" 25-month timeframe, driven by Morgan Stanley's impending lease expirations elsewhere in the city. As such, Gensler, which was placed in charge of interior design, was planning the building's interior while Kohn Pederson Fox was still designing the base building. Morgan Stanley also sought to award at least 15% of the construction contracts to minority-owned businesses and at least 5% to women-owned businesses. In addition, the project employed apprentices who had graduated from the city's vocational high schools. Gregory Clement, one of the lead architects of the building, compared the project to the previous development planned in 1990: During construction, a sheeting and shoring system was used to prevent movement from the Seventh Avenue Subway running below the site. Furthermore, every floor on the building was raised to accommodate cables and wires so that the building would have the capacity to serve its occupant even as technological demands grew. To accommodate delivery trucks, Tishman built a temporary loading dock behind the building in what had been Exxon Park, but restored and "enhanced" the plaza once construction was finished. Tishman also built a temporary office on-site, and the build team coordinated off-site retreats with an outside facilitator. As many as 1,500 workers were involved in construction at the project's peak.
The building was topped out during November 2000, less than eight months after construction began, and was on track to be finished within the 25-month time frame required by Tishman's contract. Originally, Morgan Stanley had planned to relocate 3,700 workers to the building from the World Trade Center, mainly from its trading and institutional sales departments. Between 1585 Broadway and 745 Seventh Avenue, Morgan Stanley would be able to accommodate a total of 5,000 traders.
Sale to Lehman Brothers and completion Morgan Stanley's sentiment shifted after the collapse of the World Trade Center during the September 11 attacks, which exposed the vulnerability of concentrating workers in one area dependent on the same electrical grid and services. At the time, Morgan Stanley's backup facilities and trading departments were concentrated in Times Square. The company deemed the building's proximity to its headquarters a risk, electing instead to lease space in other parts of Manhattan and elsewhere in the New York metropolitan area. Morgan Stanley CEO John J. Mack, who had been the project's largest proponent, had also been ousted from the company; The Wall Street Journal said the idea of selling the partly-complete building was "more palatable" as a result. By then, the building was worth $450 million, and real-estate experts believed that it could be leased for despite the attacks.
In October 2001, Morgan Stanley sold the building to Lehman Brothers, which had just been displaced from its headquarters at 3 World Financial Center due to the attacks and was leasing rooms at the nearby Sheraton Times Square Hotel. The company was urgently seeking a new headquarters, since the alternative was waiting one-and-a-half years for its original building to be renovated. The sale price was variously cited as $650 million or $700 million; it was the only major office-building purchase in Manhattan in the four months after the September 11 attacks. The deal was at the time the most expensive purchase of a New York City office tower on a square-foot basis, at . The Rockefeller Group maintained its ownership stake after the deal. After selling the building, Morgan Stanley had to lease about elsewhere. Morgan Stanley went on to sublease office space elsewhere in the city before purchasing the former Texaco Headquarters in Purchase, New York in an effort to disperse its operations. Meanwhile, Lehman planned to sell or lease out its former space after buying 745 Seventh Avenue; the firm ultimately sold its ownership stake in 3 World Financial Center in 2002.