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Manhattan Office Building Sales Confront a Host of Challenges
Manhattan’s office building sales market faces a perfect storm of challenges: from inflation and the new work-from-home normal to interest rate hikes and a dearth of financing, the New York Post reported Thursday. Financing concerns jeopardized an $855-million deal for the HSBC building at 452 Fifth Ave., where the anchor tenant is leaving.
“Anything that needs capital or pro-forma work on vacant space, or renewals or needs financing at today’s higher rates — those deals are being re-priced,” Doug Harmon, chairman of capital markets at Cushman & Wakefield, told the Post. “Very high quality, newer assets that are well-leased are still very sought after.”
Harmon is offering a 500,000-square-foot office condominium at 575 Fifth Ave. at pricing expected to exceed $400 million.
However, while investors are still making bullish bids, banking on office’s long-term recovery, deal-making has become expensive as mortgage rates rise, despite cash on the sidelines, the Post reported.
- ◦Sale/Acquisition
- ◦Financing
