Despite all the doomsaying about the demise of the New York City office market in the wake of the Covid outbreak, deals are still getting done in the troubled sector.
Since the start of 2021, over $21 billion worth of office properties have changed hands across the city; 89 percent of that volume was in Manhattan.
The Real Deal scoured the city’s ACRIS property transaction database for all sales of office buildings and properties with a major office component worth $1 million or more recorded from the start of 2021 through the second quarter of this year and identified 559 transactions totalling $21 billion in volume. Unsurprisingly, most of those deals — by both volume and deal count — were in Manhattan.
Though Manhattan bagged 89 percent of the total volume — $19.8 billion — it accounted for less than half of the total number of deals, at 42 percent, underlining the outsized value of the borough’s office properties.
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Just as all borough markets are not created equal, the old adage of “location, location, location” also holds true among the main office districts in Manhattan. The top 10 neighborhoods for office deals over the past three and a half years accounted for 63 percent of all deal volume on the island.
The Grand Central area boasted the most office volume, with $2.5 billion across 12 purchases since the start of 2021. That chart-topping total was anchored by SL Green’s sale of a 50 percent stake in 245 Park Avenue to Japanese developer Mori Trust for $1.77 billion last summer.
Hudson Square booked nearly as much volume ($2.1 billion) over the same period, but on the back of only three office deals, with most of the credit going to Google’s blockbuster purchase on 550 Washington Street for $1.97 billion in early 2022, which shattered the pandemic-era record and gave a much-needed boost to morale boost to the office sector.
Flatiron brought in the third most office investments over the past three and a half years, though its total volume of $1.6 billion was spread across 29 separate purchases.
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Sales volume in the Manhattan office market has always been dominated by a select few mammoth deals; the top 10 transactions since the start of 2021 accounted for over 63 percent of the borough’s total sales for the period.
After Google’s $1.97 billion purchase of 550 Washington Street from Oxford Properties and pension fund manager CPP Investments, and SL Green’s sale of a 50 percent stake in 245 Park Avenue for $1.77 billion, the third priciest office deal of the past three and a half years was Los Angeles-based CommonWealth Partners’ $1 billion purchase of 441 Ninth Avenue in Hudson Yards in late 2021 from Cove Property Group and Baupost Group.
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ViacomCBS’s 2021 sale of its iconic Black Rock office tower at 51 West 52nd Street to Harbor Group International for $760 million ranked as the fourth priciest office transaction in the past three and a half years.
In a more recent deal, Aby Rosen’s RFR Holding’s sold 980 Madison Avenue — and the land under it — for $560 million to an entity affiliated with Michael Bloomberg just last month, rounding out the top five.
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