Posted on 01/18/2024 2:35:26 PM PST by dennisw
World's biggest private equity fund takes a $450million hit on prestigious New York landmark amid a collapse in the commercial property market Comes as landlords across the country write down their portfolios in the wake of high interest rates and an exodus of office workers The price of office space has fallen 35 percent since 2022 leaving US banks vulnerable to billions of dollars in shaky loans The world's biggest private equity fund has become the latest victim of America's hollowed out office culture after it marketed its landmark New York building for a quarter of what it paid.
Blackstone paid around $600 million for the 26-storey tower at 1740 Broadway in 2014 but is now offering it to anyone willing to pay the $150million left on the mortgage. It comes just a week after Shorenstein put the 62-storey Aon Center in Los Angeles on the market for $153.5 million, down from the $269 million it paid ten years ago.
Persistent high mortgage rates and the millions of Americans still working from home have been blamed for the collapse in prices and an office vacancy rate reaching a record 19.6 percent in major cities earlier this month.
'I think this is an existential moment,' said RXR real estate boss Scott Rechler.
'This post-COVID world of higher interest rates, the changing nature of how people work and live, we're not going back to where we were, and it's going to be turbulent.'
(Excerpt) Read more at msn.com ...
Looks like Bidenomics is working well.
The collapse has been pronounced in the biggest cities with DC facing a 21.1 percent vacancy rate and San Francisco’s 34 percent.
It has led to a 35 percent fall in office prices from their peak in early 2022 and left banks vulnerable to billions of dollars in shaky loans.
About $117 billion worth is expected to be due this year and needs to be repaid or refinanced, according to the Mortgage Bankers Association.
Economists last month found 40 per cent of office loans on bank balance sheets were underwater - owing more than the property is worth.
Smaller regional banks who loaned the money to buy them could themselves be at risk if the loans default as they are not big enough to handle the losses.
Blackstone bought the 600,000-square-foot property between 55th and 56th streets from real-estate investment trust Vornado with a $308million mortgage and began a major re-fit of the historic building.
It stopped paying the mortgage in March 2022 and occupancy had fallen to an eye-watering 7.4 percent by September of last year.
‘How could one of the world’s biggest landlords quit on a relatively modest $308 million loan, after they spent a fortune on modernizing the building with a new lobby and restaurant?’ an insider demanded.
No one wants to commute to work in these shiiity cities. You might get mugged or killed by the skinnys and the hostiles.
So none wants to report to actual work in DC and NY and San Fran Sicko. So all done by the remote bs version of work.
Ya had to go woke. Everyone knew the consequences.
Biden Trainwreckonomics.
And yet they supported Biden and the rats defund the police antics and the open border that lets drugs and illegals make the cities dangerous for people who actually go there to work.
You’d think they would have supported the law and order policies of Trump. Wonder how many of these big names support the rats because they have something in their “personal” lives to hide and they figure Trump might not go along with that.
Every single city in America is shitty because of minorities, mainly blacks.
If work was done over the last 4 years, it can continue to be done remotely.
These same investors have priced real people out of the housing market.
Commercial real estate developers failed to read the transition to remote work. That is their fault.
At the same time, companies that serve the remote workforce have made billions.
There are winners and there are losers and in this case, commercial real estate bet on the wrong horse.
This will not do! They must sell it at a price determined by a court in New York. Otherwise they could be liable for undervaluing it or overvaluing it.
You are absolutely CORRECT.
Gee that’s a real shame. Oh, look at the time, gotta go.
Read the speech from the new Argentina president.
Woke leftist things are destroying everything.
Oh, look at all of the cases that NY Atty General Latitia James can file, about folks overstating their property values.
Go for the big bucks - convert the building to migrant housing project
$150 million for 600,000 sf.
is that a reasonable price for slum property?
bookmark
I pray all of Blackstone’s investments drop by at least this much.
They will house illegals in these. If you thought malls descended into violence and rundowns, wait till they destroy the insides of these office buildings.
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