Return of the Billion-Dollar Asset in NYC Tests Buyer Confidence, Capital
New York Times reports: The fourth largest office building by gross leaseable area in New York City has been recently placed on the market – its price: about $2.0 billion. Owners of 111 Eighth Avenue, a 15-story pre-war building that covers an entire city block between 15th and 16th Streets in Manhattan, is testing the commercial real estate market’s recovery by asking over $600 for each of the well-located office tower’s three million square feet. The New York Times recently referenced the office offering a “verdict on the vitality of the New York market, or at least the appetite for big deals.” But is this too much, too soon, with the lessons of the real estate bubble still fresh in investors’ minds?
Dan Fasulo, managing director of Real Capital Analytics, is quoted in the Times’ article on the property offering as saying, “There haven’t been any sales of this size post-financial crisis… it's (111 Eighth Ave) a unique, mixed-use property in one of the best submarkets in Manhattan.” Regarding what types of buyers this outlier may appeal to in the current buying environment, Mr Fasulo suggests that “…real estate investment trusts will be all over it,” as those companies have amassed large quantities of capital over the past several quarters. Foreign buyers and large private-equity firms will also be interested as the asset is located in Manhattan, one of the most stable and active markets in the US, according to Mr. Fasulo.
For more on why 111 Eighth may prove to be the latest litmus test for the commercial real estate market’s return to robust activity, in Manhattan at least, see the full article on the New York Times website. For more recent transactions in Manhattan or the office sector, please see the Real Capital Analytics website.
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Posted by: Nina Turner