Remote work leads Capital One to close Melville office, eye smaller space in Jericho

Capital One Financial Corp. plans to reduce the size of its Long Island office by more than 80% due to the popularity of remote work, according to documents obtained by Newsday.

The bank has decided to leave 1307 Walt Whitman Rd. in Melville, which is about 200,000 square feet, said Matthew L. Blauvelt, senior director of real estate transactions.

"We are relocating approximately 300 Capital One associates from our current location," he wrote in a July 19 letter to the Nassau County Industrial Development Agency, which Newsday obtained under the state’s Freedom of Information Law.

In a separate letter, also obtained under FOIL, Daniel J. Baker, an attorney for Publishers Clearing House, said it has been negotiating a sublease with Capital One in which the bank would rent 35,000 square feet at 300 Jericho Quadrangle in Jericho.

That building is home to the headquarters of Publishers, which doesn’t need as much space after announcing it would lay off nearly half the site’s 393 employees.

The IDA approved the sublease last month. The agency’s OK was required because Publishers receives tax breaks for the Jericho headquarters.

Capital One, which is based in McLean, Virginia, is the latest big employer in Melville’s Route 110 corridor to jettison office space because of remote work.

In 2022, Henry Schein, Long Island’s largest public company by revenue, announced plans to move out of one of the two buildings at the corner of Baylis and Duryea Roads that have served as its headquarters.

Nearby, MSC Industrial Direct Co. replaced its 170,000-square-foot headquarters and warehouse on Maxess Rd. in 2020 with 26,000 square feet of offices at 515 Broad Hollow Rd. — an 85% reduction in space.

Long Island was home to 24.7 million square feet of Class A office space as of June 30, with 18.4% available for lease. Asking rents averaged $32.34 per square foot, according to a research report from the Colliers real estate firm.

Blauvelt, the Capital One executive, said it no longer needs the multi-floor office building across from the Melville Marriott hotel.

"Capital One originally purchased the Melville building [in 2016 from credit-card processor First Data Corp.] in order to grow our presence in New York. COVID changed our growth plans at this location, and this resulted in us deciding to close the Melville property because it was too large for our workforce," he said.

"We decided to explore the possibilities of moving this workforce to new locations and/or to existing Capital One locations nationwide. If this was a pure financial decision, we could easily move these jobs to current Capital One locations where we have enough additional space around the country at no further cost and/or hire people remotely around the country," Blauvelt said.

But bank spokeswoman Kate Burgess said last week, "We made the decision to relocate the Melville-based hybrid associates to a new office in the area."

Capital One had about 430 employees in the Melville office two years ago, the bank said at the time. Last week, Burgess did not address Newsday’s question about why the workforce had fallen to the current 300 people.

Employees at the Melville office work in automobile financing, commercial banking and risk management.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.