For the first two months of 2008, the Manhattan landscape for big-building sales has been an arid one, as rattled lenders and wary sellers sit tight amid the credit drought.
Manhattan has seen only one sale over $400 million since the end of 2007, a year when such sales poured forth on a monthly, if not weekly, basis. That one purchase, of 650 Madison Avenue by Ashkenazy Acquisition Corp. for $695 million, follows a December when two billion-dollar buildings closed.
Larry Silverstein and the CalSTRS pension fund picked up 1177 Avenue of the Americas for just over $1 billion, and SL Green, along with a minority Canadian partner, took 388-390 Greenwich Street downtown for $1.575 billion. Also toward the end of 2007, Paramount Group bought 31 West 52nd Street for $540 million-plus and Global Holdings bought 120 Park Avenue for $525 million.
Buyers and sellers sealed these deals during the same credit crunch Manhattan real estate grapples with now on the cusp of spring. So why the two-month (and counting) dearth of mega-sales?
“In periods of uncertainty, people tend to not be that active, either on the buy side or on the sell side,” said Woody Heller, a top investment-sales broker with Studley.
One man could turn everything around, of course: Credit crunch poster boy Harry Macklowe. Unable to pay off billions in debt, Mr. Macklowe’s seven buildings he bought last winter for $7 billion are expected to soon hit the sales block as individual properties. And he is said to be taking final bids for his GM Building at 767 Fifth Avenue, which is likely to fetch a truly historic $3 billion-plus if sold in full.
It would be a welcome jolt. Aside from the 650 Madison sale, 2008 has seen only one other of note: SL Green announced on Tuesday that it closed on its $310 million sale of 1250 Broadway to Murray Hill Properties.