The Real Deal New York

From the April issue: Three record-shattering deals epitomized Manhattan real estate’s recent boom: Tishman Speyer’s $5.4 billion purchase of Stuyvesant Town, Kushner Companies’ $1.8 billion acquisition of 666 Fifth Avenue and Mort Zuckerman’s purchase of the GM Building for $2.8 billion. At the time, each of these billion-dollar-plus transactions was deemed a triumph of sorts for its respective investor. But today, with both commercial and residential values plummeting in Manhattan, these trophy deals aren’t looking quite as sweet. “Overall, office values have got to be down on average by at least 30 percent due to three things: market rent has come down, vacancy rates have risen and cap rates have risen,” said Joel Leitner, principal of the Leitner Group, a commercial appraisal services company. And even trophy properties, which have historically outperformed the real estate market in New York City, can’t stave off the effects of the credit crunch.