RCA in the commercial property press:

Vacant NYC Verizon Tower Tests the Limits of Buyer Appetite

Crain's New York Business reports: Looking for a unique downtown Manhattan investment opportunity? Crain’s reported that M&T Bank recently listed the 1.1 million-square-foot 357 Pearl St for $125 million. The property, once owned by Verizon to house telephone switching equipment, has 32 floors that are capable of holding triple the average weight per-square-foot a typical office building can handle, and has 15 foot ceilings throughout.

M&T Bank was the original lender when Taconic Investment Partners acquired the property for $172.5 million in 2006. Taconic planned to convert the well-located property into a Class A office tower to capitalize on the property’s potential. However, a renovation never took place and Taconic stopped paying their mortgage, prompting the lender to reclaim the property as real estate owned.

Despite the property’s potential for renovation into office or residential space, M&T may have a listed it at an unrealistically high price. Crain’s quotes Real Capital Analytics’ managing director Dan Fasulo as stating, “The building has a lot of fleas.” By this, he clarifies that any potential redevelopment would run the new buyers at least $200 million, and a more obtainable sale price would be around $100 million. A test of buyer confidence in the Manhattan office market could be held if any deep-pocketed institutional buyers or REITs come forward for the very value-add opportunity.

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Posted by: Nina Turner

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