There are a few reassuring market omens despite today’s record Manhattan 21% office availability.
SL Green sold a 49% stake in 245 Park Ave. in a deal that valued the building at a healthy $2 billion.
Tishman Speyer and Larry Silverstein pulled off a $330 million loan refinancing for their office tower at 11 W. 42nd Street.
But there’s precious little to cheer downtown, suffering from near-30% office availability and no relief in sight.
One highly successful Manhattan dealmaker with decades of experience termed our recent story on the plight of 111 Wall Street, where 1.1 million square feet stand vacant after a total redesign, “the tip of the iceberg.”
This broker said the 90 million square-foot downtown market “is suffering like no other in terms of all the maladies — high interest rates, remote work, antiquated office stock, upside-down financing” — facing the entire market.
Although the World Trade Center and Brookfield Place have relatively low availabilities, “Almost everywhere else it’s significantly higher.”
The relative stability of the more modern buildings is “a similar flight-to-quality phenomenon to what’s going on in midtown, only at a much smaller scale.”
The fact that so few deals have been done larger than 40,000 square feet so far this year below Chambers Street — mostly renewals — shows the depth of the problem.
“Downtown’s historical lower pricing has always been a relief valve for midtown and midtown south,” our insider said.
“But with prices softening across the city — propped up in the high-end properties by increasing concessions — downtown’s bloated inventory is not even on companies’ radar.
“It isn’t clear what will turn this ship around. The true tale here has yet to be recognized or written,” the veteran dealmaker said.
And he told us all these things before we learned last week that bankrupt MediaMath will likely unload 100,000 square feet at Four World Trade Center.
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