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 Postreported 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.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).