Florida-Based Deutsche Bank Investment Bankers, Traders Can’t Even Remember What It Was Like To Consider It A Victory To Get To Sit Down During Their Commute To WorkBy Bess Levin
As those of you outside of New York City can attest, in other parts of the world, people do not need to limit their grocery store purchases to the number of bags they can carry (if they prefer not to order food online, sight unseen), wait for the B for what feels like an eternity while F train after F train after F train passes through the station, stake their claim to an apartment the second they walk through the door if they want any shot of getting it,* fantasize about having an in-unit washer/dryer, or feel like they’re taking crazy pills while watching the featured couple on any give episode of House Hunters declare they are looking for “At least 4 bedrooms, a minimum of 2,000 square feet, big backyard, granite countertops, stainless steel appliances, double vanity in the master bath, finished basement, gotta have a finished basement” on a $185,000 dollar budget, a wish list that turns out to be totally doable.**
None of these are the reasons why Deutsche Bank is moving a whole bunch of bankers and traders to Jacksonville, Florida– those would be the immense cost savings, of course–, but they are some of the factors being cited as bright sides among the relocated.
Veteran Deutsche Bank AG investment banker Michael Drexler relocated from Wall Street to northern Florida a couple of years ago, where he now enjoys surfing in his spare time. Mr. Drexler, who is in his 40s, is part of a new breed of investment bankers and traders who are working hundreds of miles from the financial industry’s historical roots in lower Manhattan. Deutsche Bank is playing a leading role in Wall Street’s transition away from the narrow New York street that is the industry’s namesake. It is part of a frenzied cost-cutting effort across the banking industry, where flagging revenues are pinching profits. Deutsche Bank, the Frankfurt-based lender that is one of the world’s largest by assets, is trying to save €4.5 billion ($6.1 billion) annually by 2015. Part of its strategy can be found in a Jacksonville office park, where palm trees were swaying outside on a recent balmy day and where costs, for both the bank and its employees, are a fraction of what they are in New York. “The new reality is that you do most of your work by phone. Why can’t we do that in a location with a better cost of living?” asks Mr. Drexler, who heads the investment-banking operation in Jacksonville. Life in Florida has its conveniences. For one, commuting is less of a hassle. Another perk, Mr. Drexler says, is that you can drive-through anything from Starbucks to the dry cleaners, and there is valet parking even at the movie theater.
While banks have outsourced back-office Wall Street jobs for years, Deutsche Bank is moving actual bankers and traders to its near-shore trading desks. Deutsche Bank’s efforts, which also include moving London-based employees to Birmingham, England, will eventually involve about 8,000 jobs, according to Chief Financial Officer Stefan Krause. He said in an interview that those locations will be about 30% cheaper than if the same jobs were based in New York or London…Mr. Drexler lives in nearby Atlantic Beach, a 15-minute commute—similar to his previous commute while living in New York. He surfs about once a week and says his cost of living is about 40% of what it was in New York. Jacksonville doesn’t usually rank very high on lists of destination cities in the Southeast for new graduates from the region, in part because it isn’t a big industrial or financial hub. It also can be a hard sell to New York-based traders, who aren’t sure they can give up big-city living. But many have embraced it. Ryan Horvath , who graduated from Virginia’s College of William & Mary in 2008, chose to accept a job as an analyst with the commercial real-estate team in Jacksonville. He was recently asked by his group to transfer to New York and declined, preferring the Florida lifestyle. Priya Desai, a vice president in the institutional-client group who is in her mid-30s, says she applied for a job in Jacksonville last year after working at J.P. Morgan and Lehman Brothers in New York and making a stopover in London. “The first time I visited Jacksonville was at the interview, and the first thing I thought was, ‘It’s so green, and it’s so clean,’” Ms. Desai says. She leased an apartment a mile from work and now has a seven-minute door-to-door commute, versus 45 minutes in New York…She pays 25% of what she used to pay in rent for a bigger apartment in a complex with a pool.
*Only to be told “Ooo, yeah, there are already 5 applications in on the place.
**Though not before declaring at least one out of the three homes uninhabitable because two of the bedrooms are “Wayyy too small” and could “MAYBE work as an office, or a nursery, MAYBE.