If I were a skyscraper on the market right now, I’d have low self-esteem. For the most part, top-tier castles that would this time last year have sold within six weeks are now languishing on the market for upward of six months.
Even the Forbes building! Bids for the cool glass of water at 60 Fifth Avenue, which the Forbes family put on the auction block with much ballyhoo last year, were due in September.
“It was marketed in a bid process, but it did not clear,” said a source close to the negotiations. “They’re still talking with people.”
The investment team at Cushman & Wakefield, which is marketing the building for the financial magazine, is now accepting bids as they come.
Blame it on the market. Blame it on the alignment of the stars. Blame it on Harry Macklowe.
Mr. Macklowe’s empire, which had a growth spurt last year when he leveraged the GM Building and a mere $50 million of his own money to buy Sam Zell’s Equity Office portfolio from Steve Schwarzman’s Blackstone for $7 billion, is now being torn to pieces by voracious creditors.
To save his skin, since January, Mr. Macklowe has been trying to sell the GM Building, his seven Equity properties, or some stake in his substantial New York portfolio. So far, so bad.
Which means that the New York real estate world, which has been waiting for the Macklowe fallout to help gauge where prices should fall, is left hanging.
“No one’s doing anything,” said one of New York City’s top real estate brokers. “It’ll change when there’s liquidity in the market, and that will occur when the lenders have more access to capital, or when they’re comfortable with the pricing.”
Another wallflower of a building is 17 State Street, the 42-story, 570,000-square-foot tower that RFR Realty put on the market early this year. The tower has since been pulled off of the market and is being refinanced, according to well-placed sources.
And consider 450 West 33rd Street. Broadway Partners was holding preliminary discussions about selling a majority stake in the 14-story building—home to the Daily News and the AP. Those discussions have since ended, according to a source familiar with the negotiations.
Meanwhile, St. John’s Center at 550 Washington Street, the building with reportedly the largest floor plates in the city, was put on the auction block in November with an expected selling price of $600 million. Six months later, it still hasn’t traded (though there’s some speculation about an impending deal).
Of course, some brokers, with an optimism protein apparently woven into their professional DNA, remain bullish.
Jon Caplan, of Cushman & Wakefield’s New York investment-sales team, said that while the market is certainly grinding, he’s not convinced it’s grinding to a halt.
“There’s a strong belief in the fundamentals of the market in New York, because we’re seriously undersupplied, and there’s relatively little development,” said Mr. Caplan. “Right now, we have uncertainty about how lenders will be underwriting. As a result, we’ve had a considerably lower volume of transaction activity.”