13 posts tagged “manhattan”
Bloomberg is reporting that UBS AG is looking to secure as much as 800,000 square feet of NYC-area office space, a timely move as rental rates for Class A offices in Midtown fell 25 percent from November 2008 to November 2009 according to Colliers ABR Inc. Kris Kagel, a New York-based spokesman for UBS, noted in an email correspondence that the company is considering offices in either Manhattan or outlying areas as its current leases expire. UBS currenly occupies roughly 5 million square feet in New York City, suburban New Jersey and Connecticut.
"We have a number of leases that come up in 2013, so we have started to look at various options including new buildings, existing building, etc.," Kagel said. "A decision probably won't be reached for several months."
"It would definitely be a boon to the landlord that lands them," said Robert Sammons, research director at Colliers. "Manhattan rents are at or near their low point. It remains an ideal market for the tenant."
For more news and information, visit Blumberg Capital Partners.
According to the Wall Street Journal, 100 Church St was once dubbed the least-occupied building in Manhattan. SL Green, a major commercial landlord in New York City, will attempt to reverse the building's fortune and has indicated it will protect its existing investment during an auction in January. The Wall Street Journal reported the glass-and-steel building was designed by Emery Roth & Sons, carries a $145 million first mortgage and has $50 million in reserves.
All factors indicate the building should become a profitable venture, due to its proximity to a major public transportation hub as well as the current $20 million renovation underway. The financial crisis has spurred layoffs and office closures in the Midtown area but downtown has suffered recently as well. Victor Calanog, Director of Research at Reis Inc., said vacancy rates in downtown Manhattan rose from a low of 6.6% in the first quarter of 2008 to 10% as of the third quarter of 2009. Meanwhile, effective rents have dropped by close to 14% year-over-year.
For more news and information visit Blumberg Capital Partners.
The Wall Street Journal published an article examining the current climate for office building owners who are looking to keep the tenants they have in the face of one of the worst commercial real estate markets in decades. It's noted that while businesses are struggling they're also delaying property decisions and, in some cases, forced to move to cheaper spaces. As leases expire, property owners have to invest -- through rent reductions, building improvements and incentives -- to retain those tenants. "While competitive market occupancies continue to erode, we may be seeing the first signs of what will, with no doubt, be a slow market recovery," said Bill Hankowsky, Liberty Property Trust's chief executive.
Boston Properties Inc. reported this week that new tenants are paying 17% less in gross rents than prior tenants in the same space. SL Green Realty Corp. saw their revenue decline 7% in the third quarter to $249.6 million after adding nearly an extra month of free rent as a tenant incentive; the company said the current average starting rents in Manhattan were $47.31 per square foot, down from $66.78 during the same period last year.
For more news and information visit Blumberg Capital Partners.
In a move that has GlobeSt.com asking "Did NYC Miss the Boat With DTCC?", the Depository Trust & Clearing Corp. (DTCC) has signed a new lease and is moving the majority of its Manhattan staff to Jersey City. DTCC will relocate about 1,600 staff members to Newport Office Center in Jersey City, on the Hudson River waterfront across from Manhattan, when its current lease expires at the end of 2012 with employees expected to move in early 2013. While the bulk of DTCC’s Northeast-based staff will make the move to the new 415,000-square-foot space at 570 Washington Blvd in New Jersey, DTCC will retain a headquarters location and approximately 700 employees in lower Manhattan. Terms of the deal were not disclosed.
"After lengthy deliberations with officials in New York and New Jersey, we have concluded that a move to New Jersey is the right decision," said Donald F. Donahue, DTCC Chairman and CEO. DTCC used a broad set of criteria to make the decision, including the competitive costs for a long-term lease, economic incentives, availability of infrastructure support (telecomm, transportation), accessibility to DTCC headquarters, the ease of commuting for our employees, ability to retain and recruit highly-skilled staff to the location and other quality of life issues for DTCC employees. "We are continuing to negotiate for space in lower Manhattan to accommodate our corporate headquarters and a number of new growth businesses," said Donahue.
For more news and information visit Blumberg Capital Partners.
The New York branch of the Bank of China has provided a non-recourse loan of approximately $120 million to W.P. Carey & Co. for the New York Times Company's Midtown Manhattan headquarters. Carey bought the property this past spring in a $225-million sale-leaseback deal for 21 floors of the building, leasing the space back to the New York Times for 15 years with an option to repurchase the property in the 10th year for $250 million.
"Despite the fact that a large number of lenders remain on the sidelines, especially for loans over $50 million, we continue to see strong interest for loans on high-quality properties that are owned by strong, experienced sponsors," said Steve Kohn, president of Cushman & Wakefield Sonnenblick Goldman, after securing the loan for Carey. The New York Times and joint venture partner Forest City Ratner Companies developed the 52-story tower over a two-year period beginning in 2005 at a cost of approximately $800 million; Forest City still owns the building's remaining 750,000 square feet of space accoring to CPE.
For more news and information, visit Blumberg Capital Partners.
SL Green Realty Corp., a REIT focused on Manhattan office properties, has entered into a sale-purchase agreement to sell 49.5% interest in 485 Lexington Avenue to a joint venture partnership comprised of Herzliya, Israel-based Optibase Ltd. and Gilmore USA LLC. The JV, Mazal 485 LLC, will take ownership of nearly half of Green 485 JV LLC, the entity designated as owner of 485 Lexington (also known as Grand Central Square), in exchange for providing SL Green with approximately $20.8 million, as well as a loan of $20 million according to a Commercial Property Executive article.
The transaction results in an implied asset valuation of approximately $504.2 million, or $547 per square foot, and includes $450 million of existing debt, which will remain outstanding. The implied cap rate of this transaction is 6.25%. SL Green CEO Marc Holliday commented, "This is a first, but significant step towards the sale of interests in 485 Lexington Avenue. If ultimately approved, the transaction would demonstrate that the Midtown Manhattan office market continues to stand as one of the world's top locations and that investor interest is once again on the rise."
SL Green originally acquired the 921,000 square foot office tower in 2004, and immediately embarked upon a $90 million capital repositioning program which included window replacements, installing a new lobby, replacing retail storefronts, and upgrading corridors and elevators. The property is currently 96.8% occupied with tenants including Citigroup and The Traveler's Indemnity Corporation which, together, occupy half the space.
For more news and information, visit Blumberg Capital Partners.
Facing the expiration of its lease in 2010, the Federal Deposit Insurance Corporation is moving its New York City regional office. The government corporation that guarantees the safety of deposits will be moving from their current location at 20 Exchange Place in Lower Manhattan to the iconic Empire State Building during next year's first quarter. The 102 story office building is located in the Garment District. According to Globest.com's Paul Bubny, officials at the FDIC chose the 2.8 million square foot location after feedback from employees and noted the building's proximity to major transportation hubs. The FDIC's 250 employees will be occupying 102,960 square feet for an initial lease period of 10 years.
CoStar.com reported Joel Wechsler, Michael Gottlieb, Howard Grufferman and Joe Harkins of Grubb & Ellis represented FDIC. Daniel Bodner, Stephen Eynon and Daniel Rodriguez-Sains represented the landlord, Peter Malkin. Reporter Christina Mckinnon also noted recent plans by Jones Lang Lasalle to reduce energy consumption by 40% over the next four years.
For more news and information, visit Blumberg Capital Partners.
The Wall Street Journal was the first to report that a group of investors led by RCG Longview and George Comfort & Sons have signed a contract to purchase Worldwide Plaza. The purchase, made for an undisclosed amount, will relieve Deutsche Bank of the final piece of the Macklowe portfolio of office towers, though DB will retain a stake in the building. Earlier this year, a subsidiary of CB Richard Ellis Inc. bought 1540 Broadway, another building in the portfolio, for what sources day was $355 million, at least a 60% discount off what Mr. Macklowe paid in 2007.
About 600,000 square feet of the building is being vacated by Ogilvy & Mather Worldwide, the advertising and public relations firm owned by WPP Group Plc, which is moving to a building on 11th Avenue. The vacancy made it harder to sell the building, said Jessica Ruderman, a Real Capital senior market analyst in a Bloomberg article.
For more news and information, visit Blumberg Capital Partners.
Three out of every four office towers in New York's Midtown Manhattan now have sublet space available, according to a New York Times article. Colliers ABR, a CRE services company, reports that sublets now account for roughly 40% of the space available in Midtown, a measured increase from the 30% available in a smaller market a year ago.
Real estate experts suggest that sublandlords are able to compete with building owners by slashing rental prices. Robert Sammons, the managing director in charge of research at Colliers ABR, said that sublet space in trophy office towers along Madison Avenue and Park Avenue has been leasing for as little as one-third of what that space might have commanded in early 2008, at the height of the roaring market. "A year and a half ago, this space might have leased for $150 per square foot," Mr. Sammons said, while he has heard of recent sublets in high-end buildings in this office corridor with annual rents of as little as $40 to $50 a square foot. "This is the most remarkable turnaround in pricing that I've ever seen in such a short period of time."
For more news and information, visit Blumberg Capital Partners.
The New York Times published an article today titled "New York Office Landlords Go Small", commenting on the choice some office spaces are making to turn large vacant blocks of real estate into smaller, pre-built offices as the commercial real estate market continues to see vacancies on the rise. "In the past, landlords would have been less likely to break up whole floors, because it is easier to do one single transaction," said Peter Turchin, an executive vice president at CB Richard Ellis. "But that’s not where the market is now."
According to a report from Cushman & Wakefield, the first quarter of 2009 in Manhattan saw nearly 85% of the leases inked for spaces under 10,000 square feet, with another 11% in the 10,000 to 25,000 square foot range. Brokers say such a strong tilt toward small offices is unusual in New York, where the financial industry, in particular, has traditionally rented large blocks of space.
For more news and information, visit Blumberg Capital Partners.
