By Meghan Hall
J.P. Morgan Chase has made it clear that the Bay Area is one of its most important strategic locations. The financial services behemoth has already purchased the naming rights to the Golden State Warriors new arena in San Francisco. Recently, it also announced that it would be building a fintech center in the region where it plans to expand its growing Bay Area-based digital payments enterprise.
The announced plans made in October of 2018 were for the bank to build a campus in Palo Alto that will eventually house more than 1,000 employees in an effort to consolidate several of its Bay Area offices. The development, a two story office building totaling 185,000 square feet, will be located at 3223 Hanover St. in Palo Alto, Calif., in the famed Stanford Business Park, which has over the decades spawned many technology firms.
The project is designed by San Francisco-based Form4 Architecture and it will be built by Truebeck Construction. The move by J.P. Morgan is an indication of the company’s efforts to further integrate with the technology sector that has revolutionized the banking industry with apps such as PayPal, Venmo, Stripe and Square in recent years. Currently, J.P. Morgan has more than 50,000 employees in the technology sector.
“The addition of a first-class location is a key step for growing our presence in the Bay Area,” said Bill Wallace, head of digital, consumer and community banking at J.P. Morgan Chase in a statement. “This is an important market for us, and we’re looking forward to expanding our footprint and attracting more of the area’s top talent.”
According to reports and interviews, the project site was formerly occupied by Lockheed Martin. The planned development will be built in two phases; the first will be a 115,000 square foot, two-story building, while the planned second phase includes an 80,000 square foot edifice, according to Trubeck Construction in a statement to CNBC. J.P. Morgan declined to go into further detail about the second phase of the project.
“We now have delivered record results in seven of the last eight years, and we have confidence that we will continue to deliver in the future,” said Chairman and Chief Executive Officer of J.P. Morgan Chase Jamie Dimon in a letter to shareholders. In 2017, the company earned $24.4 billion in net income on revenue of $103.6 billion, which Dimon emphasized is a strong indicator for the company’s continued growth. The bank is the largest in the U.S. by assets, according to Fortune. Last year J.P. Morgan bought WePay, a Silicon Valley-based firm which specializes in payment software. WePay’s 250 employees are expected to move to the new location upon completion.
Palo Alto is becoming home to more than just major technology companies as various industries become more integrated with computer and tech products. Other payment platforms such as Visa, who has a strong relationship with J.P. Morgan and announced a 62,000 square foot research center in the area in 2016, are moving to the region to be closer to the area’s top talent and innovation clusters. Asking rates in Silicon Valley, and more specifically Palo Alto, are some of the most highest in the region, with the overall average asking rent in the Silicon Valley city coming in at $7.35 per square foot for all classes of office space. Class A office space is even more expensive, garnering a price of $8.27 per square foot, according to Cushman & Wakefield’s Q3 2018 Silicon Valley Market Officice Beat. In comparison, the current average asking rent is $4.52 per square foot across the greater Silicon Valley region.
The project is expected to break ground in early 2019, with completion slated for 2020.