New York Market Overview
- Total Manhattan Class A Office vacancies decreased from 5.7 % vacant to 5.5 % vacant
- Total New York City Office vacancy decreased from 5.4 % vacant to 5.3 % vacant
Summerset Partners who last month announced it was acquiring 450 Park Avenue for $1,589/RSF. Now, the firm is struggling to close the $510 million deal, because of the rising cost of debt and requirements for more equity. The same is true for all developers such as Macklow who recently completed the $7 billion acquisition of several Manhattan skyscrapers from the The Blackstone Group and an Israeli investment group, who just bought the Lipstick Building at 885 Third Avenue and 292 Madison Avenue. Manhattan's office vacancy rate has fallen under 7 percent for the first time since 2001 and could drop more this year, driven by strong job growth, provided financial firms do not start layoffs.
Demolition work at the Con Ed site
On August 20 Developer Sheldon Solow is to begin the formal process for a mixed-use redevelopment of the former Con Ed site between 35th and 41st streets along the East River when the Department of City Planning is expected to certify a development proposal that would rezone the area to allow construction of six residential buildings, a 666-foot office tower and 1,550 parking spaces. Community groups oppose the project as too dense, and seek to minimize the size of the parking garages, open up access to the waterfront and add affordable housing units and a public school.
When Leona Helmsley died she owned properties worth at least $2.5 billion including an ownership interest in the Empire State Building and the Park Lane Hotel. The fate of these properties remain uncertain.
Merrill Lynch is reported to be talking to Vornado Realty Trust to relocate its headquarters from Downtown to a new office tower across from Madison Square Garden to be the anchor tenant in Vornado's proposed 2.5-million-square-foot building at the site of the Hotel Pennsylvania.