Mayor Bloomberg and Midtown East
Mayor Michael Bloomberg’s push to modernize Midtown East office buildings has become a legacy issue as the mayor’s reign winds to a close, according to the New York Daily News. Bloomberg wants to rezone the area bounded by Third and Fifth avenues and East 39th and East 59th streets to allow developers to knock down aging, undersized buildings and replace them with taller, modern towers. [more]
While there was little or no change in asking rents in Midtown and Midtown South last month, Downtown saw a moderate drop after landlords cut prices in anticipation of higher vacancy rates in the coming months, a new Manhattan office leasing report covering February from commercial service firm Jones Lang LaSalle shows.
The average asking rents in Midtown did not change from January, at $59.43 per square foot, while in Midtown South, the average asking rents rose by 3 cents from the prior month to $43.79 per foot, JLL reported.
But Downtown, asking rents fell by 31 cents in February to $36.97 per square foot, the data show.
James Delmonte, a JLL vice president and director of research, said that for Manhattan, overall pricing has flattened compared to the steep drops seen last year, but Downtown asking rents dipped as landlords expected more available space to be put on the market.
“There are adjustments in pricing ahead of [an] anticipated continued rise in vacancy rates,” he said. [more]
Pricey Midtown East office real estate took a hard hit between 2007 and 2009, according to a submarket analysis released today by Eastern Consolidated. The report, which examines the neighborhood between Sutton Place and Fifth Avenue, and between 38th and 60th streets, looks at data from the last decade. The office building market in that neighborhood “epitomizes the rollercoaster ride in commercial sales over the last 10 years,” according to the report, which showed a startling drop between the peak year of 2007 and the as-of-now trough year of 2009 in Midtown East. While 2007 saw almost $10 billion worth of office building transactions close, just $100 million worth of transactions were made in the same market in 2009. And while 2007 saw 55 office buildings sales, 2009 only had three office building transactions in Midtown East. TRD
The commercial real estate market has shown moderate improvement quarter-over-quarter, but still not enough to compensate for the battering the industry has endured over the last year, according to a new report from commercial brokerage Eastern Consolidated. One bright spot in the report is commercial building sales performance among non-multi-family properties. Sales volume among those properties hit $1.08 billion in the third quarter, nearly double the $510 million seen in the second quarter this year. Even so, the report points out that this uptick in volume is due largely to the sale of two buildings, 825 Eighth Avenue and 70 Pine Street, rather than a broad-based improvement. The report is equally ambivalent on the subject of multi-family property sales. While the data “clearly indicates a turnaround in Manhattan multi-family sales,” the sales volume has much room for improvement. The third quarter saw 101 multi-family buildings closed, up from 66 in the previous quarter, while price per square foot inched up to $271 from $260. TRD [more]
The vacancy rate for Midtown office buildings hit its highest level in
more than 15 years last month, fueled in part by several large blocks
of space that were placed on the market, a new report released
yesterday by commercial services firm Colliers ABR shows. But overall Manhattan data was mixed, showing some strength in the
Midtown South market where the vacancy rate declined modestly and
prices rose for Class A office space, the report indicates. The Midtown vacancy figure reached 14 percent, its highest level since
March 1994 when the rate reached 14.1 percent, the report covering
October says. Asking rents also fared poorly in the district, falling
1.2 percent to $58.16 per square foot. In a positive sign, the vacancy rate for all classes of buildings in
Midtown South fell .1 points to 14.1 percent and the average price for
Class A office space rose by $1.36 per square foot to $50.88 per foot.
But for all classes of buildings in the district, the average asking
rent fell by $0.48 per foot to $39.88 per square foot. more
The real estate crash has hurt Broadway Partners, which at nine years
old is one of the newer kids on the block, more than some of its rivals
in commercial real estate. The company’s strategy was to purchase
buildings using highly leveraged loans, wait for rents to increase and
sell the buildings for a profit within two years. The company purchased
28 office properties nationwide in 2006 and 2007. Already, Broadway
Partners has defaulted on more than a dozen buildings’ short-term loans
and has seen two of its buildings fall into foreclosure. It is unclear
whether the company will be able to raise enough capital to pay off its
loans and survive. [more]
