Finally, it’s time to set up a hall of fame for Manhattan real estate dealmakers. Just one catch: with prices the way they are now, who wants to buy a building to house a museum?
That conundrum illustrates the soaring price of Manhattan commercial space — the subject of a special feature in this issue on the biggest real estate buyers of the past year in Manhattan.
Macklowe Properties was the most prolific buyer of the year, followed by Tishman Speyer, each fueled by one big mega-deal. Newcomer Broadway Partners came in third.
The Real Deal’s list, based on deals between May 2006 and May 2007, is dominated by commercial real estate acquirers; nine of the 10 biggest buyers made the list by purchasing primarily office towers. A surging local economy and low vacancy rates are driving up rents and making office space sell for ever-higher prices.
A number of the buys came from veteran Manhattan real estate players. But some buyers, like Istithmar, a Dubai-based holding company, and Broadway, are newer to the top echelons of New York commercial building owners.
Should a new record be set for real estate investment sales volume in Manhattan in 2007, it would mark the fourth consecutive year the record has been broken. In 2006, $34.7 billion was spent on property deals, according to brokerage reports. In 2005, the figure was approximately $22.1 billion. Between April 10, 2006 and April 10, 2007 (the most recent range available for an overall figure), $45.7 billion was spent on Manhattan properties, according to Cushman & Wakefield.
List-topper Macklowe inked more than one big buy in the past year. There was, of course, its massive, $7 billion portfolio purchase of eight office buildings from the Blackstone Group in February. In December, it also won a reportedly fierce bidding war to acquire 1330 Sixth Avenue for $498 million. The 40-year-old firm now controls over 12 million square feet of Manhattan office space.
Tishman Speyer’s purchase of Stuyvesant Town and Peter Cooper Village for $5.4 billion earned it the second spot on the list. This deal is the only residential real estate purchase to make the top 10 list. Tishman’s massive buy of REIT Archstone-Smith happened too late to make the list.
Other Manhattan-based firms had all-star years, too.
In the past year Broadway Partners went on a nationwide commercial real estate buying spree, which in New York included shelling out $1.25 billion for 1.2 million square feet at 280 Park Avenue and $644 million for 1.7 million square feet at 450 West 33rd Street.
SL Green, the city’s largest owner of commercial real estate, was also an active buyer in the past year. It acquired a number of Midtown properties, including 919 Third Avenue and 1185 Sixth Avenue. It also purchased 333 West 34th Street, the fee interest in 2 Herald Square and the office portion of 1745 Broadway in three deals that were announced too recently to make the list.
Dubai-based firm Istithmar was the only foreign company to make the list — though it has recently sold off most of its office holdings in the city.
Meanwhile, Kushner Companies’ purchase of 666 Fifth Avenue, which earned it a spot at number eight on the list, set the record for the highest price paid to date for a single building in New York City. The company also owns the Puck Building on Lafayette Street.
Kushner has said it intends to sell $2 billion in residential properties elsewhere to fuel purchases of more Manhattan office space.
The ninth spot on the list is occupied by Beacon Capital Partners, a Boston-based real estate firm with holdings on two continents.
Rounding out the list is Yonkers-based AVR Realty Co., which bought 5 Times Square for $1.28 billion from Boston Properties.