December 2004: Manhattan Office, Retail and Industrial Space Update

Office vacancy declines as the local economy improves and NY unemployment declines to 6.1%: 

New construction and proposed layoffs from Marsh & McLennan (3,000 employees) and Verizon relocation from Midtown will increase the supply of office space and cause vacancy rates to stabilize in the near future.  The Office and Retail Market Downtown show strong gains in leasing as firms rush to take advantage of the downtown benefits which tenants must execute a lease by year-end to get the benefits.

Development Sites for Sale:

• 106-22 East 124th Street under contract close to the asking price of $9.5 million (at $125 per buildable square foot).
• 72 East 111th Street is located between Madison and Park Avenues, a 40,000 square foot development site incorporated with a community facility that would add another 35,000 buildable square feet, for a total of 75,000 buildable square feet.
• 2211 Third Avenue is located at the southeast corner of 121st Street. It consists of approximately 100,000 buildable square feet ideal for a mixed-use retail and residential building.
• 161-71 East 110th Street steps from the subway site lends itself to luxury condominium or rental units.
• 322 West 57th Street, The Sheffield, a 50 story 845 unit apartment building, is being offered for $400 million.

Noteworthy leases:

• American Express signed an 18 year lease for 155,000 square feet at 3 World Financial Center for floors 19-24 and part of 25 and 26 from Brookfield Properties which owns a 51 percent interest in the building.
• HSH Nordbank AG leased 57,000 feet at 230 Park and leaves 25,300 sf at 590 Madison.
• PB Capital is leasing 41,000 feet at 230 Park.
• McKee Nelson is moving downtown and renting 67,000 RSF at 1 Battery Park Plaza.
• Hard Rock Café rented 41,000 square feet in the former Paramount Theater at 1501 Broadway. previously a WWE venue. 

• 2 Fifth Avenue: The Rudin family agreed to sell the land to the shareholders for $29.25 million. The building had been paying $900,000 a year or more in rent to the Rudin’s and was facing a future reset to market rate.
• 229 W. 43rd Street a 15-story, 750,000-square-foot building was sold for $175 million to Tishman Speyer Properties and the New York City Employees' Retirement System and the New York City Teachers Retirement System as its investment partners. The building is the current New York Times' headquarters. The Times will remain as a tenant until 2007.
• Anthony Westreich completed his $26 million buyout of Max Capital Management Corp. and renamed the firm Monday Properties. Monday properties will pay back certain lenders on 350 Madison Avenue and 260 Park Avenue South.
• The Resnick’s are paying the city $40.45 million for the lot bounded by West, Chambers and Warren streets,  to build a  383,000 square feet tower with 400 apartments and 27,600 square-foot community facility and a 10,000 square-foot space to be leased to the Department of Education as a pre-kindergarten and kindergarten annex.
• Donald Trump has changed his mind about selling 40 Wall Street a 70-story Art Deco office tower.  Trump was seeking $400 million and some offers had topped $350 million.
• 1908 Park Avenue sold for $1.8 million or $84 per buildable square feet. 4061-67 Broadway and 4069-75 Broadway sold for $15 million. The properties are close to Columbia University and contain 84 rental apartments and 13 stores. The average apartment is 1,200 square feet but rents for under $700 a month.
• 425 Central Park West sold for $13 million, a 62 units seven-story elevator apartment building. The building has 57,155 square feet, and a net operating income of $318,102. The building sold for $227.45 per square foot.
• Williamsburg bank building, Brooklyn tallest building (34 story 512 feet tall) sold and is going to be converted into 180 residential units. The seller was HSBC, but the buyer and price were undisclosed.
• RFR bought 980 Madison Avenue with 100,980 RSF for $126 million.
• 1180 Avenue of Americas, a 380,000 RSF office building, was bought by a German Fund TMW for $150 million yielding a 5% return.
• 4 Albany Street, a 130,000 sf building was bought by Moinian for inclusion in a development site of 217,000 sf for $30 million.
• Miki Naftali's Elad Properties 650 Sixth Avenue was purchased in contract for $47 million to convert it into apartments. The Elad’s have previously bought the Gift Building at 225 Fifth Avenue and plan to build a 22-story tower at 160 W. 86th Street