When a $332 million building in Manhattan sells for just $8.5 million, it has to raise some eyebrows and some big questions. Back in 2006, 135 W 50th Street Manhattan sold for nearly a third of a billion dollars, with nearly every floor occupied. And demand for office space was high. And demand for commercial space could barely be met.
The auction that had the building sell for approximately 3% of its last purchase price is causing many businesses to look at Manhattan with a different pair of glasses.
For decades, Manhattan has been the gold standard of the real estate industry. But now with the impact of the pandemic upon the general economy still taking its toll, causing many businesses to transition from office-headquartered operation to hybrid-virtual operation, Manhattan’s huge commercial real estate empire is facing an economic recapitulation, and many think the bottom is nowhere in sight. Major challenges are still to face the Big Apple in the years to come.
This building is 23 stories high, and had been the headquarters to Sports Illustrated. It is in the neighborhood of the old McGraw Hill building, Exxon building, or, as we remembered it, the Standard Oil of New Jersey building. Blocks from Rockefeller Center, and many other landmark headquarters such as Warner Communications and other corporate giants that made up the Dow Jones average.
This building was originally erected in 1963 and housed New York Telephone, which became Verizon and Zales jewelry. For a while now the building’s owner was looking to sell the building several times for under $50 million, but even those discounted prices appeared to be too frothy.
When the auction for the 135 W 50th Street building went online, the starting bid was $7.5 million. For nearly the entire time of the auction there was only one offer, and that was for $8.5 million. The auction notification indicated that the seller’s minimum was not met. Seconds before the auction was about to close, the green button supposedly lit up, indicating that the reserve had been met.
Right now the building is just 35% occupied. Some are thinking that it could be converted to residences but such conversions often end up to be very, very costly initiatives.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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and attract business back to its 5 boroughs. Just look at when Amazon wanted to build a headquarters here, the city government turned its back upon the idea. So until the government understands that it needs to be business-friendly, the commercial real estate industry in New York will continue to nosedive.