Mort's triumphs turning sour
Crain's New York Business reports: Boston Properties Chairman Mortimer Zuckerman could barely contain his glee after picking up the General Motors Building last summer for $2.8 billion in a fire sale, trumpeting the transaction as the best he had made in his nearly 40 years in real estate.
How times have changed. With the Manhattan office market entering a depression, Mr. Zuckerman is recording losses on some of his holdings in the city instead of crowing about them.
Over the past month, his real estate investment trust has taken hefty write-downs on three midtown towers and pulled the plug on construction of two others. Meanwhile, the REIT is scrambling to contain fallout from the implosion of Lehman Brothers, a major Manhattan tenant, and the troubles of its biggest leaseholder, Citigroup.
Trends in the midtown market are sobering. The vacancy rate on top-quality buildings in the area shot to 11.3% last month from 9.9% in December and 6.2% in January 2008, according to a recent report by Colliers ABR. The average asking rent dropped 15% in January from a year earlier, to $80.70.
“Everyone is hurting right now,” says Dan Fasulo, managing director of Real Capital Analytics.
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Posted by: Nina Turner