Posted on 08/01/2024 5:53:06 AM PDT by Cronos
In 2006, the hulking office building at 135 West 50th Street in Midtown Manhattan sold for $332 million. Tenants occupied nearly every floor; offices were in demand; real estate was booming.
On Wednesday, it changed hands again, in an unusual online auction — for $8.5 million.
The staggeringly low sale price of the 23-story glass behemoth that was once the headquarters of Sports Illustrated is the latest and perhaps most surprising sign of how the pandemic has upended the state of office buildings in New York City, home to the largest central business district in the United States.
Several large Manhattan office buildings have sold in recent years at steep discounts, some going for less than half of what the previous owners paid, in a market that has yet to hit rock bottom.
But office developers and sales brokers in New York City said they could not recall another large Manhattan building like 135 West 50th that had been sold for so little.
... the latest sale price reflected the new reality for Manhattan’s office sector. With companies embracing hybrid and remote work, employees do not visit the office as much and most buildings are no longer considered safe investments, he said.
...The buyer faces an immediate financial challenge: The auction was for the building itself, not the land. That is owned by a publicly traded real estate firm, which collects a monthly lease. But the rent from the building’s current tenants is not enough to cover those monthly payments, which are set to increase every five years and do not expire until 2123.
135 West 50th has more than 920,000 square feet but is just 35 percent occupied with office tenants, down from about 40 percent a year ago.
(Excerpt) Read more at nytimes.com ...
Not just the pandemic, but when the New York Attorney General tries to get that pound of flesh from Trump, who is seriously wanting to do business in NYC anymore?
Because of the pandemic. Not woke open borderism. A pandemic that was mostly a mass hysteria epidemic.
They don’t even want to pay to keep the lights on. Finally starting to see some fire sale prices.
What does that do to real estate taxes?
I’m liking the sound of this.
The building price did not come with the land. The value of the building will go below zero and the land owner will have a building, free and clear.
Why would someone buy such a fancy tent on top of rented land?
NYC deservedly brought it on itself. More will befall.
They never go down on their own. I'm sure they will appeal.
Please Re-Lease me, Let me go..........................
Nobody saw that coming. /s
Politicians voted for by New Yorkers did this. How they responded to the pandenic, their open borders, their refusal to jail or punish violent criminals, their high taxes, their global warming utility prices and rules, and then their prosecution of their own most famous business person.
We need Escape From New York rules soon. Fence that place off to keep the politicians and their voters from leaving the scene of their crimes.
The area is $65/sqft when most cities are getting below $21/sqft.
Pandemic and employees not interested in an office, High city taxes, high crime, illegals all about, lawfare from political DA’s and AG’s. Seriously, who wants to sign up for that?
Where hysterics is concerned, it took a global pandemic for the rest of the world to catch up with the Liberals’ default state of clinical hysteria!
It’s the cudgel Liberals continue to browbeat the rest of the world with, so they will NEVER want to put down, now
What happens to Brandt Leland and their amazing toilets, hot receptionist and copier? What about the Play Now building? Will Kruger Industrial Smoothing be able to get the stain off of the Grace Building? Will Penske ever be allowed to operate again? What about Sanilac? So many questions.
I’m not sure how that works, but maybe somewhere Henry George is smiling.
Those tower storage facilities for office workers are no longer popular. Finding the next new thing for the real estate is a real trick. The buildings are optimized for piles of ibm selectrics and cute 20 somethings in polyester mini dresses being the AI memo writers for a class of drunk at noons. These buildings were designed for the cast of Mad Men, very verbal salesfoces and customer services at a 1-800 number. Both of those workforces have been long moved outside of the US metros.
The IT and Wellness infrastructure within these buildings is more expensive to maintain than a remote workforce. The costs of the meatbags to walk into the building is infinitely more expensive than the Teams and zoom budgets. You can buy a heck of alot of airline tickets every quarter for a sales meeting gathering in someplace optimized for what sales people do.
A building in Fort Worth recently sold similar
And of course there is the unique designed skyscraper in New Orleans that has sat empty for decades never truly occupied from jump street
Yet a prime intensely desired space can still bring the tenants in all but the Camden or Jax Miss type markets
It’s a fickle industry except in booms
Booms like Nashville and Austin are having where the skyline is growing quite literally exponentially
Nashville skyline yes pun intended has grown 500% since 1995
In an ironic twist Manhattan residential towers are booming
What happens to real estate holding co., Banks, etc?
When their $Billions in assets becomes 1 Million?
a one off is a one off...
But, if this becomes “A Thing”. We are going to see a massive financial melt down.
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