From left: Joseph Moinian and his 50 West 23rd Street, and Sitt Asset Management’s 240 West 40th Street

Fitch downgraded a group of securitized loans from Wachovia Bank that includes a Flatiron office tower owned by Joseph Moinian and a Midtown office tower owned by Sitt Asset Management.

The ratings agency downgraded eight loans by Wachovia Bank Commercial Mortgage Trust series 2005-C19, citing concerns about declining cash flows and commercial real estate values.

One Moinian loan is backed by the developer’s 13-story office tower at 50 West 23rd Street in the Flatiron District. The building was 97 percent occupied as of October and has a debt service coverage ratio of 1.52 percent as of June, according to Fitch. A building with a ratio of less than 1 is considered to have negative cash flow.

In June, the building’s broker, Newmark Knight Frank, renewed the 64,000-square-foot lease for a magnet school, called the Manhattan Village Academy for lower rent, following more than a year of negotiations. [more]

From the October issue: On paper, at least, the Flatiron District would appear to possess all
the trappings of a bustling, mixed-use area for commercial real estate:
Centrally located (check); moderately priced (check); good restaurants
and sophisticated architecture (check and check). But at just over 19 percent, the district also boasts one of the
highest office availability rates (which measures the percentage of
space that is available for lease, or will be available within the next
12 months) in Manhattan. And real estate experts are grasping for
explanations. According to a report by the commercial brokerage CB Richard Ellis, the
availability rate in the Flatiron District climbed 0.2 points in August
to 19.3 percent. In comparison, the neighboring districts of Chelsea
and Union Square had rates of just 11.6 percent and 10 percent.

From the September Issue: In the West 20s, the name “F.M. Ring Associates” is emblazoned on the
sides of numerous buildings. The fading mural-like advertisements look
like relics from a bygone era. Brokers say much of Ring’s valuable
portfolio, most of which is in the prime neighborhoods of Gramercy,
Chelsea and Flatiron, sits strangely empty. This month, The Real Deal looks at the mystery of the Ring family and profiles a host of big under-the-radar players in New York. more

Buildings in the Flatiron District

Real estate prices in the Flatiron District began falling in 2008, and transaction volume has plunged over the last six months, according to an analysis of the neighborhood by investment services firm Eastern Consolidated. For the majority of the last seven years, the average price per square foot in the Flatiron District ranged from about $250 to $350 per square foot. The average price per square foot for office buildings in the neighborhood peaked at $600 per square foot in 2007. One of the few commercial transactions of this year in the Flatiron District took place when real estate developer Sorgente Group purchased a more than 50 percent stake in the Flatiron Building at 23rd Street and Fifth Avenue. The company plans to turn the building into a hotel. TRD [more]

Times Square (left) and the Flatiron District

The average asking rent for all available retail space in Manhattan
fell 11
percent between fall 2008 and spring 2009, the first meaningful decline
since September 11, 2001, according to the Real Estate Board of New
York’s spring 2009 retail report. Some areas, however, saw rents increase. Ground-floor average asking rents
in Times Square increased
71 percent between spring 2009 and the same time last year. The average asking rent in the area — on Broadway and Seventh Avenue, between 42nd and
47th streets — where Forever 21 and American Eagle are opening,
reached $1,381 per square foot this spring, up from $809 during the
same time last year. The median asking rent jumped 79 percent, to
$1,450 a foot from $809. TRD

[more]