There are some reassuring market signs despite today’s Manhattan office occupancy record of 21%.
S. L. Green has sold a 49% stake in 245 Park Ave. in a deal that valued the constructing at a healthy $2 billion.
Tishman Speyer and Larry Silverstein obtained refinancing for a $330 million loan for his or her office tower at 11 W. forty second Street.
But there may be little to rejoice in a city center that suffers from nearly 30 percent office occupancy and no views of relief.
One successful Manhattan retailer with years of experience called our recent story of the plight of 111 Wall Street, with 1.1 million square feet of vacant space after a whole redesign, “the tip of the iceberg.”
The broker said the 90 million square foot downtown market “suffers like no other from all of the maladies – high rates of interest, distant working, antiquated office stock, reverse financing” – that your entire market is facing.
While the World Trade Center and Brookfield Place have relatively low availability, “Almost in all places else is far higher.”
The relative stability of more modern buildings is “a phenomenon much like what happens in town center, only on a much smaller scale.”
The undeniable fact that there have been so few deals larger than 40,000 square feet under Chambers Street this yr – mostly renewals – shows the depth of the issue.
“The historically lower downtown prices have at all times been a security valve for downtown and the south side of town,” our insider said.
“But when prices across town fall – buoyed in luxury real estate by rising concessions – the bloated downtown inventory is not even on the radar of firms.
“It’s unclear what this ship will turn around. The true story has yet to be recognized or written,” said a veteran of the deal.
And he told us all this before we learned last week that a bankrupt MediaMath would likely vacate 100,000 square feet on the 4 World Trade Center.