commercial real estate

We all know that increased concessions (like rent-free months) have been bringing down real Class A office rents for a while now, but for the first time since 2005, asking Class A rents have begun to creep downward.

The Real Deal has crunched the numbers from the first quarter Colliers ABR report and is reporting:  read more »

New York City may be the star of the Grand Theft Auto IV, but from a business standpoint, New York isn’t investing enough in the gaming industry, according to a study released today by the Center for an Urban Future, a Manhattan think tank.

In fact, New York City, whose gaming industry employs just 1,200 people, trails “gaming hubs” like Seattle, Los Angeles, Montreal and Boston (Boston?!?!), according to the study, “Getting in the Game.”

But there is some good news:  read more »

The real estate wonks at Cushman & Wakefield have said it, so it must be true: the market is contracting.

Egad(!) is right.

C&W's "First Quarter 2008 New York Capital Markets Group Manhattan Market Overview" makes the following sobering conclusions:  read more »

Hotelier to the masses Sam Chang continues to retrench amidst market turmoil, selling a Financial District lot to Magna Hospitality for $60 million, according to a report in The Real Deal.  read more »

Shine your shoes and do your hair up pretty, tomorrow's Ingenies Night! The Real Estate Board of New York hosts the 64th annual commercial real estate Oscars at the 101 Club on Park Avenue starting at 5:30. Invitation only!

Who will take home the coveted Most Ingenious Deal of the Year Award? Last year it was Woodie Heller and Howard Nottingham of Studley.

Here's a list of current nominees. See you there!

It’s a sign of the times: Japanese firm Hiro North American Properties’ sale of the office tower at 650 Madison Avenue has closed, and, at $680 million, it’s the biggest building sale of 2008 so far (and the only over $400 million). Wasn’t too long ago—10 months, give or take—that $680 million for a Midtown building was ho-hum.

Not anymore. In the fourth month of 2008, $680 million is the new $1 billion. It’s a deal to be picked apart. So let’s do so.  read more »

“Wow, look at the mist,” murmured Sarah Craig, a Vassar College freshman, as she and 60 other students walked onto the 52nd floor of Seven World Trade Center, developer Larry Silverstein’s glamorous office skyscraper that, this rainy afternoon, pierced the clouds.

Thanks to the top 10 floors still being up for lease, the penthouse hosts a lot of visitors — Mr. Silverstein’s publicist and his staff lead four to five tours a week — and lots of glamorous parties.

On Feb. 12, the starkly gorgeous concrete-and-glass space hosted babealicious swimsuit models celebrating the release of the 2008 Sports Illustrated Swimsuit Issue (the models traded their bikinis for cocktail dresses for a party that Silverstein Properties spokesman Dara McQuillan said was fabulous).

Of course, the Vassar students weren’t there to chat about star-studded fetes. The three classes — Intro to Urban Studies, Urban Geography and Architecture of the Modern World — had bussed in from Poughkeepsie and spent the day touring Chase Plaza and the perimeter of Ground Zero.  read more »

Things will be good, not great, in the Manhattan office market this year, according to a new report from investment sales brokerage Marcus & Millichap. Key findings of the report:

• Citywide, employers are forecast to create 16,000 jobs in 2008, a 0.4 percent annual gain.
• An estimated 3 million square feet of office space will be brought online in 2008.
• Vacancy is forecast to end the year at 5.4 percent.
• Asking rents are projected to advance 8 percent to $57.51 per square.
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The front page of the Wall Street Journal this morning had some rare good real estate news, however reserved:

Even optimistic commercial-property developers are stacking sandbags to hold back a financial deluge in the market for office towers, hotels, shopping malls and other commercial real estate.  read more »

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In 2007, nonprofits leased 1,287,743 square feet of commercial space in New York City, according to a new report from Suzanne Sunshine, a vice president at CB Richard Ellis. As of February 2008, 25 nonprofits were looking for 801,000 square feet of space in the city. Got any?

The Real Estate Board of New York has announced the nominees for its 2007 Ingenious Deal of the Year Awards. The commercial real estate awards will be presented on April 15 at the 101 Club on Park Avenue.

We covered the Ingenies last year, when Studley's Harold Nottingham and Woody Heller were the big winners.

The nominees after the jump.  read more »

Crain's reports that Goldman Sachs has extended its lease of 517,000 square feet at Brookfield Properties' One New York Plaza for 15 months as it awaits the completion of its new headquarters on West Street in Lower Manhattan. The headquarters is supposed to be done by late 2009.

The Wall Street Journal today reports that Merrill Lynch is likely to put off a decision on its headquarters location for at least another five years, as it is seeking a five-year lease renewal with current landlord Brookfield Properties at the World Financial Center downtown.

Such a move comes as good news for Brookfield, and seems to be not so great news for Larry Silverstein, who had hoped to lure the bank into his 175 Greenwich Street tower, a.k.a. 3 World Trade Center.  read more »

You're not imagining it: Foreigners really are buying up more of Manhattan lately, and it's not just the condos they adore. They love whole buildings and whole building portfolios, too, apparently.

Foreign buyers account for one-third of the more than $2.6 billion in investment sales in Manhattan currently under contract, according to a report out this morning from brokerage Cushman & Wakefield.

Office-leasing activity in Manhattan dropped in 2007, suggesting a slowdown in a once furiously fast-paced market. In the fourth quarter of 2007, companies leased slightly more than 5 million square feet of office space, less than in each of the previous three quarters, according to a report out today from brokerage Cushman & Wakfield. Leasing dropped 12.8 percent for the year from 2006.  read more »

One more thing on the plans to build a tower over the Port Authority Bus Terminal. Our fellow Observer blog The Media Mob reports that the plans vindicate New York Times' publisher Arthur Sulzberger Jr.'s decision to move the paper's headquarters from 229 West 43rd Street to a new tower at 620 Eighth Avenue.

He sold the old headquarters in 2004, when Eighth Avenue was but the seedy western edge of Times Square.  read more »

Midtown Manhattan is the 12th most expensive office market in the world, well behind the priciest, London's West End, where the cost of occupying office space averages $328.91 a square foot annually. In midtown, the average cost--which includes rent and taxes--is $100.79 a foot, according to a new report from brokerage CB Richard Ellis.

Midtown did top the list of the most expensive office markets in North and South America, well out ahead of the next most expensive, the Calgary Central Business District. Suburban Los Angeles was the third most expensive market in the Americas; and downtown Manhattan was fourth. They were the only other two American office markets besides midtown to make CBRE's top 50 most expensive markets worldwide.

The topmost expensive office markets were all in Europe and Asia. For instance, just ahead of midtown is Singapore with an average occupancy cost of $102.37 a foot annually.

Press release, including the top 50 list, after the jump.  read more »

A fashion company that owns brands such as London Fog, Mudd and Joe Boxer, has signed a 30,556-square-foot lease at Joseph Moinian's 1450 Broadway.

The deal for the Iconix Brand Group was announced today by the Moinian Group, which brokered the deal along with Newmark Knight Frank.

Full release after the jump.  read more »

An market report out today by brokerage Colliers ABR puts the Manhattan Class A office vacancy rate at 5.5 percent for October, up from 5.3 percent in September and 5.1 percent in August, when the rate hit its nadir.

So is the credit crunch – the loyal punching bag for all things negative in the New York City real estate world now – to blame?  read more »

Both the Times and Post are following up today on financial giant Merrill Lynch's potential interest in moving to the current Hotel Pennsylvania site.

According to the Post's Lois Weiss: "Merrill Lynch execs would prefer to be at Vornado Realty Trust's [hotel site]" as opposed to Larry Silverstein's forthcoming World Trade Center redevelopment.

"What Larry [Silverstein] has decked up financially is not superior to [Vornado's] Hotel Pennsylvania, and it's not big enough," our source said.

That statement somewhat contradicts what Merrill Lynch sources told Ms. Weiss just a month ago, when they complained the hotel property was "not attractive enough to employees."

"They can't make up their minds," hotel preservationist Gregory Jones told The Observer.  read more »

Wells Real Estate has closed on 222 East 41st Street for $319.8 million, according to city records.

A press release was sent out in late August announcing that the 25-story office building had been sold. The seller is listed as Ceres Real Estate.

The email accompanying the press release described the 390,000-square-foot property as a “Class A+ midtown office building,” a designation that had yet to be bestowed on a commercial property in Manhattan. So, um, congratulations.  read more »

Does Sheldon Solow have something big in mind for just down the block from his iconic 9 West 57th Street?

The Solow Realty and Development Company has officially closed on 20 West 57th Street for $60 million, according to city records. The property went to contract back in January and closed on July 8, 2007. The sales price on the eight-story, 37,000-square-foot building comes in at approximately $1,611 a square foot.  read more »

Did Harry Macklowe overstep his bounds earlier this year?

A recent issue of Commercial Mortgage Alert says that the Manhattan developer could lose all those properties that he acquired for $7 billion back in February.  read more »

Will Brooklyn offices be hanging “No Vacancy” signs in a year or two?

A new report reveals that the office vacancy rate is right around 10 percent in the borough these days. And if it weren’t for a few blocks of Class A office space that became vacant over the last year, that rate would be lower.

Marcus & Millichap’s second-quarter Office Research Report advises that property owners will be able to increase asking rents by 6 percent this year to $26.95 per square foot.

However, brokers are going to be really happy with this stat: Over the last year, a median sale price of $339 per square foot was recorded in Brooklyn. That is a 27 percent increase from the preceding 12-month period.

The full release is after the jump.  read more »

Real Estate Capital Partners is looking to provide some relief from escalating midtown office rents.

The real estate investment firm recently closed on 229 West 36th Street for $57.6 million, according to city records. The 130,000-square-foot building sold for the very-1999 price of $440 per square foot.  read more »

SL Green’s sale of 292 Madison is a done deal, and the prolific city landlord made a healthy profit off the transaction.

The 193,000-square-foot, 26-story office building sold for $140 million on June 7, according to city records. The New York Post reported when the deal went to contract back in April to the Los Angeles-based Metropolitan Real Estate Investors.  read more »

The sale of 530-534 Broadway and 536-538 Broadway is now official, and so are $1,000- per-square-foot prices for Soho buildings.

The two connected buildings at the corner of Spring and Broadway, which total 190,000 square feet, sold for $190 million on July 19, according to city records. The Observer reported when this deal went to contract to a group of Israeli investors back in May.  read more »

Muss Development announced today that Con Edison and New York City have signed leases totaling 120,000 square feet in Queens Tower.

The city will take 105,000 square feet on the first six floors of 88-11 165th Street in Jamaica, Queens, according to a press release, and Con Edison signed on for 15,000 square feet on the 10th floor. The leases are for 20 and 10 years, respectively.

According to the release, long-time tenant Verizon Communications vacated the 10-story building in 2005, and Muss Development came in and carried out a significant rehab, gutting the building and installing new utilities and elevators.

Full release after the jump.  read more »

The sale of the Atlantic Bank Building at 960 Sixth Avenue is officially a done deal.

The 16-story, 99,000-square-foot property sold for $105 million on July 13, according to city records. The building sits just north of Macy’s on the corner of 35th Street and Sixth Avenue.  read more »

Hearst has added yet one more building to its growing arsenal around Columbus Circle.

The publishing behemoth recently closed on 811 Ninth Avenue for $17.1 million, according to city records. Lightning quick would be appropriate terminology for how rapidly this deal went down: Hearst went to contract and closed on the 21,500-square-foot property on the same day, July 19.  read more »

Luxury lodging is coming to Harlem.

Paul Reisman of New Jersey-based Reisman Properties recently told The Observer that his company is breaking ground in August on a hotel on 125th Street.

“The hotel will run along Fifth Avenue from 125th to 126th Street,” Mr. Reisman said.

Although a flag has yet to be picked for the property, Mr. Reisman said that a number of very high-end chains are in the running. “Right now, who we go with is an open question,” he said. “But we are narrowing it down.”  read more »

Robert Gibson, the powerful retail broker whose clients include H&M, is leaving CB Richard Ellis for Cushman & Wakefield, two sources said.

 

CBRE might remain the city’s dominant commercial brokerage, but it appears C&W is making in-roads in eroding its retail group. The defection of CBRE retail brokers to C&W is becoming a well-worn path for many (even if it’s not, say, for the leasing side).  read more »

A few things learned from SL Green’s quarterly conference call with investors:

• Andrew Mathias, CIO, said that the company is considering either recapitalizing or selling two buildings: the 1.1-million-square-foot 420 Lexington Avenue and the 560,000-square-foot 625 Madison Avenue.
• Marc Holliday hinted that SL Green might sell the development site near Grand Central where a 900,000-square-foot tower can be built. “We’re working it, looking at it and there is nothing to report now,” he said. “It’s something we’re going to be focused on to try to pass the ball on because the market is right for it now.”
• SL Green will refurbish the 1.8-million-square-foot 1515 Broadway, with or without Viacom, which just signed a 400,000-square-foot lease in Hudson Square. Mr. Holliday said the renovation would be done with the goal to push rents at more than $100 per square foot.
• When SL Green paid more than $300 million for a majority of the land underneath the Lipstick Building, it did so at the same time Haim Revah’s Metropolitan Real Estate went to contract in April. SL Green was not a last-minute investor to help Revah, as one investor and several real estate people thought was the case.
• Anne Taylor signed an unreported renewal at 1372 Broadway for more than 100,000 square feet.

Brokerage GVA Williams represented Farrar, Straus and Giroux in its move to West 18th Street from its traditional home on Union Square. The Observer reported the news last week.

Leon Manoff and Howard Kaplowitz of GVA Williams represented Holtzbrinck Publishers, on behalf of FSG, at 18 West 18th Street, where asking rents are in the mid to high $30s, a spokeswoman said. The deal is one of several that GVA Williams has struck for Holtzbrinck, adding up to a total of 400,000 square feet over the past few years.

The 5th Avenue Chocolatiere is opening up its fourth Manhattan location.

The 30-year old family-owned and operated chocolate company has leased 300 square feet at 11 Madison Avenue, according to Winick Realty. The company signed a 10-year lease in the building that also houses the Danny Meyer staples Tabla and Eleven Madison Avenue. The asking rent on the space was $200 per foot.  read more »

Walmart is moving their executive offices to Times Square.

SL Green, the city's largest office landlord, announced today that the strip-mall staple has signed a 10-year lease for 46,103 square feet at 1372 Broadway. The executive offices will occupy the entire second floor and second-floor mezzanine of the building, according to the press release.

SL Green completely renovated the 21-story, 534,000-square-foot building in 1999. The release noted that other tenants in the building include Ann Taylor Inc. and Ross Stores Inc.  read more »

Cushman & Wakefield announced this morning that it has closed on its purchase of real estate investment company Sonneblick Goldman. C&W said in a press release that Sonnenblick Goldman will bring "highly specialized debt structuring, mortgage banking, [and] equity raising" to 51 West 52nd Street and will be renamed, a little boringly, Cushman & Wakefield Sonnenblick Goldman.

Cushman announced the agreement in May.  read more »

989 Sixth Avenue recently sold for approximately $510 per square foot, and it looks like Saks Fifth Avenue may be involved in the deal whether the luxury clothing company likes it or not.

On June 29, Meringoff Properties unloaded the 96,000-square-foot, 21-story building for $49 million to a buyer listed in city records as 989 Sixth Realty LLC.  read more »

Joseph Moinian has officially closed on 417 Fifth Avenue.

The developer dropped $125 million for the 11-story, 392,000-square-foot building, according to city records.

The Observer reported way back in February when this deal went to contract. The building sits on the corner of 38th Street and some of its main tenants are a 10-year-old boy’s dream come true: Atari and Marvel Entertainment.  read more »

“The real estate market in New York these days is like the weather,” Cushman & Wakefield’s Joe Harbert said this morning. “Hot!”

The chief operating officer for the New York region certainly had the statistics to back up that statement when the firm released its midyear report for the Manhattan commercial real estate market this morning.  read more »

Manhattan is not the only city on the verge of hanging up a “No Vacancy” sign when it comes to office space.

Charlotte, N.C., had the lowest downtown office vacancy rate in the country for the second straight quarter, according to CB Richard Ellis’ latest United States National Office Vacancy Index. The report for the second quarter of 2007 noted that Charlotte led the way with a 3.1 percent vacancy rate, followed by midtown Manhattan at 4.8 percent, and downtown Manhattan with a 7 percent vacancy rate. Rounding out the top five were Boston at 7.1 percent, and Las Vegas with an 8.5 percent.  read more »

Murray Hill Properties now officially owns 1180 Avenue of the Americas.

According to city records, Norman Sturner’s firm closed on the 22-story, 340,000-square-foot building on May 30 for $300.1 million--or close to $1,000 per square foot.

The Observer reported in April when this deal went to contract, noting that the $300 million price tag was nearly double what Prudential Real Estate Investors had paid for the building in December 2004.

SJP Properties has announced that it's two months ahead of schedule in its construction of 11 Times Square. The 40-story tower will sit at the corner of 42nd Street and Eighth Avenue, and it will be the first speculative development built in midtown in years.

No tenants have signed up in the building--thus, the speculative moniker. So, one might ask: What's the worth of bragging about building an empty tower fast?  read more »

Broadway Partners now officially owns the New York Daily News building.

The increasingly active landlord closed on the 14-story building located at 450 West 33rd Street today, according to a press release. The Observer reported back in February that the building went to contract. The sale price was $664 million.

The home of the Daily News has approximately 1.6 million square feet of office space. The paper is not the only news source in residence either: Other tenants include the Associated Press, Channel 13 and U.S. News & World Report.  read more »

Last night’s CB Richard Ellis cocktail party on the lower Manhattan waterfront was predictably filled with a lot of dark blue suits and a lot of fist pumps.

“You see they got oysters over there?” a financial type said as he extended a closed fist to a coworker in celebration.

The wine flowed as CBRE brokers and their clients prepped for the evening’s main event: getting down with Booker T. and the M.G.’s. The concert was part of the River to River festival, a series of summer events set up after Sept. 11 to revitalize lower Manhattan.

However, much of the conversation at the cocktail reception revolved around business.  read more »

Cushman & Wakefield has purchased the majority ownership position in the real estate investment company Sonnenblick-Goldman. The price was not disclosed.

Under the agreement, Cushman & Wakefield will become the majority owner in the company, while Sonnenblick principals will stay aboard. Sonnenblick-Goldman was involved in $7.5 billion of transactions last year, including arranging the $390 million financing for 485 Lexington Avenue.

This is Cushman & Wakefield's biggest move since the IFIL group purchased the company last year for $563 million. Last December, IFIL chief Carlo Sant'Albano said that the Italians would "bring something to the table in assisting the team at Cushman & Wakefield in growing their business." This is the Italians first step in proving that. 

Full release after the jump.  read more »