Are we getting bored with this monumental investment sales market? Over the past few weeks it seems like we’ve been desperate to predict its demise, whether drumming up the shaky debt markets or how lenders are freaking out or how first-time buyers are plunking down absurd prices that no one else would pay.
Can we all relax for a second and reflect on everything that’s happened this year before we get all doomsday?
The year 2007 has wildly, aggressively trumped last year in terms of buildings sold and what they’re going for—it’s on pace to double the amount of money traded in last year’s record-breaking year. It was only eight months ago that we were floored when 666 Fifth Avenue went for $1,200 a foot. Then, just a few weeks ago, a considerably less high-profile tower, 450 Park Avenue, went for nearly $1,600 per foot.
Even if this heady pace slows down—which it’s bound to—there’s a very good chance the market won’t buckle, but that it’ll just hold steady. If that’s the case, then 2007 has absolutely been a banner year—one perhaps not soon to be repeated.
Of all the frenzied things that have happened, perhaps the most overlooked theme—and, considering retail rents, one that shows no sign of letting up—is what’s happening in SoHo.
By July, three buildings down there had sold this year for more than $1,000 per square foot, which is generally regarded as the going midtown market rate. It was just last year that a sale on Spring Street went for a record $814 per foot for the SoHo submarket.
And once again, we have a new record.
Waterman Interests has paid $112 million, or a record $1,272 per foot, for the 88,000-square-foot 130 Prince Street.
“It’s a record-breaker because retail in SoHo is the cat’s meow,” said CB Richard Ellis broker Bill Shanahan, who marketed the space with legend Darcy Stacom.
It’s Waterman’s first building buy in the city. And for KBS Realty Advisors and the Kaufman Organization, the sellers, according to city records, it is a considerable upgrade from the $46 million it paid for the building in 2005.
“Think about a typical avenue office building,” said Mr. Shanahan. “You might have 10,000 square feet of retail in a one-million-square-foot tower. Here you have 15,000 square feet of retail in an 88,000-square-foot building. It tends to move the averages.”
The former bread factory-turned-art gallery-turned-storefront, which is at the corner of Wooster Street, includes a high-powered army of retail tenants: Lacoste, Swiss Army, Stuart Moore, True Religion, Georg Jensen and Melru. Average asking rent for ground-floor retail space in SoHo is at $244 per foot, according to Cushman & Wakefield.
“We are delighted to own the highest-quality asset in SoHo—a property whose value will only improve as lower Manhattan continues its renaissance,” said Tod Waterman, the buyer, in a statement.
Well, so we hope.