Where, oh where, have all the investment sales gone?
With less than two weeks to go in the first quarter of 2008, the stats make clear that Manhattan has stood witness to a major dearth of commercial-property sales, as a tight credit market and an uncertain economy have taken a toll on the demand for buildings.
Through March 17, closed investment sales totaled $784 million for Manhattan deals of at least $25 million, an utter pittance compared with the $13 billion that closed in the first quarter of 2007, according to figures from brokerage CB Richard Ellis.
The numbers do not include those that went to contract but have yet to close, though there are only a handful of large sales over $100 million that have done so.
The reasons are well known within the industry by now, as a credit crunch makes it difficult for anyone looking to buy a building to raise the needed money to do so. Would-be sellers, in hopes that better times lay ahead, are sitting tight.
That said, there seems to be a bit more activity buzzing around town now than there was a few months ago. The whole real estate world is waiting on the result of the potential sale of Harry Macklowe’s GM Building at 767 Fifth Avenue, and onlookers expect the sale of Mr. Macklowe’s seven-building Equity Office Properties portfolio to move ahead soon. If all eight buildings, including the GM, were to sell, they could potentially add more than $8 billion to the investment-sales tally, according to real estate professionals.
A 225,000-plus-square-foot building at 370 Lexington Avenue is being sold, according to a person with knowledge of the deal, with Cushman & Wakefield representing building owner Broad Street Development. Asking rents are listed between $58 and $65 a square foot.
And Broadway Partners, according to a source, is seeking to sell a stake of about 85 percent in 450 West 33rd Street, the bulky 1.6 million-square-foot building/eyesore just across the street from the West Side rail yards. Perhaps hunting for cash, Broadway is looking to sell a stake less than a year after it closed on the building for $644 million.
An 85 percent sale today would certainly bring in hundreds of millions, and, if sold at $500 a foot, say, would fetch almost $700 million. The building houses the Daily News and the Associated Press. Eastdil Secured is representing the owner.