Articles of the week ending August 23rd
Sunken Cost Fallacy_ Lessons from a Park Avenue Office Tower
By Erik Engquist. The Real Deal
The sunken costs fallacy illustrates how individuals and organizations, like the Stahl Organization with their $370 million investment in 277 Park Ave, often irrationally continue to invest in failing ventures due to the prior investments made, despite evidence suggesting it would be wiser to cut their losses.
Office Market May Have Found Its Bottom_ Report
By TRD Staff, The Real Deal
Moody’s Analytics reports signs of stabilization in the national office market, with improved price discovery and transaction volume as distressed property owners seek liquidity amidst ongoing significant losses.
Office Landlords Consider Demolitions As Conversion Challenges Mount
By Sasha Jones, Bisnow
Office landlords in New York City face challenges with conversion and demolition of office buildings due to high vacancy rates and shifting tenant preferences, prompting discussions about incentivizing conversions to residential use amidst a national backdrop of rising commercial foreclosures and varying approaches to reuse, preservation, and demolition strategies.
Midtown office tower 655 Madison Ave. slated for demolition
By Eddie Small, Crain’s New York Business
Williams Equities plans to demolish its 24-story office building at 655 Madison Ave. to potentially replace it with a mixed-use development, reflecting the trend of shifting from office spaces to retail, hospitality, and residential units amid New York’s surplus of office space and housing shortages.
JEMB Signs Yeshiva University at Herald Center
By TRD Staff, The Real Deal
Yeshiva University has signed a deal to lease 160,000 square feet at JEMB Realty’s Herald Center in NYC for a health sciences campus, replacing the former tenant ASA College and bringing the property to full occupancy.
Avison Young Busyness Study_ NYC Ahead on Return to Office
By TRD Staff, The Real Deal
A recent report reveals that Manhattan office workers are returning to the office 15% more than the national average, with a notable increase of nearly 30% on Mondays, particularly among law and media/entertainment firms, though overall office occupancy remains below pre-pandemic levels.
29 W. 35th St. to be sold at auction Wednesday
By Julianne Cuba, Crain’s New York Business
A troubled Midtown office building with a bar, facing foreclosure after the owners defaulted on a $41 million loan, is set to be auctioned for $57.6 million due to accumulated debts and financial struggles exacerbated by unpaid rent during the pandemic.
Tishman Speyer lands $301M refi on DoBro Macy’s
By Elizabeth Cryan, The Real Deal
Tishman Speyer secured a $301 million refinancing deal from Starwood Property Trust for its office development above the historic Macy’s building in Downtown Brooklyn, which features 622,000 square feet of Class A office space and incorporates the building’s original cast-iron facade.
News _ Big Office Landlords Look to These Green Shoots for the Rest of 2024
By Katie Burke, CoStar News
Office REIT executives are increasingly optimistic about a resurgence in demand for high-quality office space as leasing activities rebound, despite persistent challenges such as high vacancy rates and uncertain economic conditions.
$700M in New York Office Debt Heads to Special Servicing
By Suzannah Cavanaugh, The Real Deal
New York’s office market is facing significant distress, with over $700 million in debt transitioning to special servicing due to rising delinquency rates and declining tenant occupancy, impacting prominent landlords such as Aby Rosen’s RFR Holding and CIM Group.