Top 50 US Office Deals in 2019

[dimondpark]

Lots of money traded hands last year




https://www.commercialcafe.com/blog/...ce-sales-2019/

[suburbanite]

The price of the Coca-Cola Building can't just be for the existing asset can it? It's not very big, and at a 4% cap rate and 250,000 SF they'd have to be charging ~$150/SF net.

I don't know how heritage protection works in NYC, would they be allowed to build high-rise residential on top?

[chris08876]

Originally Posted by suburbanite

I don't know how heritage protection works in NYC, would they be allowed to build high-rise residential on top?

Yes but if the building is protected, they would have to get approval from the land mark commission. They have granted approval on many projects but some times, they will get denied. All depends on the scope of the project, design, to what extent the alteration or conversion or addition will impact the original land marked property/parcel. Cases will vary, with length of determination ranging from a month to a few months.

The way it works, if a building is not land marked, its chop-chop square time for the tower/structure, even if its a beauty. See the Bancroft Building. That was demolished. Shame, but it is what it is.



RIP 1896-2015


Credit: Hannah Frishberg

[The North One]

Originally Posted by chris08876

RIP 1896-2015

The flippant demolition of irreplaceable gems in NYC seems rampant. In any other city people would be screaming bloody murder about this. And it's so swept under the rug, you can barely find information about these very recently extinct prominent buildings. In Chicago it would be front page news.

[chris08876]

Originally Posted by The North One

The flippant demolition of irreplaceable gems in NYC seems rampant. In any other city people would be screaming bloody murder about this. And it's so swept under the rug, you can barely find information about these very recently extinct prominent buildings. In Chicago it would be front page news.

Yeah some of them are just horrific acts. Even worse is when the replacement is garbage. IDK if you've seen it, but if you haven't seen the rendering for 29th and 5th, which is u/c for this parcel, don't look at the rendering if you want to remain happy. Its just a horrible design.

I think some of us are willing to compromise if the replacement is exquisite or equal in beauty, but sometimes the garbage that replaces it is the real ache.

Here's the rendering for those that want to ruin their sleep.

Here's a particularly vomit inducing rendering:

[/IMG]

[Crawford]

Originally Posted by The North One

The flippant demolition of irreplaceable gems in NYC seems rampant. In any other city people would be screaming bloody murder about this. And it's so swept under the rug, you can barely find information about these very recently extinct prominent buildings. In Chicago it would be front page news.

Actually, Chicago has very weak landmarks laws, and is much, much more pro-development than NYC.

Roughly half of Manhattan is landmarked, and therefore almost completely off limits to development and much of the remainder is downzoned or limited special district. NYC, alongside Bay Area, is probably the most anti-development major metro in North America. It's amazingly difficult to get stuff built, from endless lawsuits, to the nation's longest environmental review, to ridiculous community board micromanaging.

And yeah, probably no place has so much old stuff get redeveloped, but that's because no place has so much old stuff. Core NYC has an absolute crapload of late 19th/early 20th century building stock, and almost no parking lots or vacant lots, so if you want something new, something old will likely come down.

[Crawford]

Originally Posted by suburbanite

The price of the Coca-Cola Building can't just be for the existing asset can it? It's not very big, and at a 4% cap rate and 250,000 SF they'd have to be charging ~$150/SF net.

I don't know how heritage protection works in NYC, would they be allowed to build high-rise residential on top?

It's for the asset. The structure is landmarked. No way could they build on top, except for maybe a small landmarks-sanctioned penthouse hidden from the street.

Most Midtown Class A buildings get north of $100 psf, and the lower (retail) floors probably get (blended) like $1,000 psf (so ground floor much higher). And these types of buildings aren't bought for amazing returns; they're a safe place for jittery money.

[chris08876]

^^^^

They would have to get approval in the hypothetical scenario that they want to build a top of it or modify it to do so. Even if a structure is land marked, does not mean that it won't ever be developed or altered. We've seen this in the past. Assuming the engineering protocols are in place as well.

So long as the proper channels are followed, and proper approvals or even recommendations are made, than in some cases, development will occur.

At least within the 5 boroughs. Other cities may have different protocols or stringent requirements.

[chris08876]

Hopefully 330 Madison on that list gets redeveloped. Vornado was bought out on that parcel originally. I'd keep a long term eye on that parcel, prime location for a super tall commanding great $/sq-ft. They had a renovation about 9 years ago, but just something to keep tabs on for the future. Its an eye sore that needs to go.

[suburbanite]

Originally Posted by chris08876

Hopefully 330 Madison on that list gets redeveloped. Vornado was bought out on that parcel originally. I'd keep a long term eye on that parcel, prime location for a super tall commanding great $/sq-ft. They had a renovation about 9 years ago, but just something to keep tabs on for the future. Its an eye sore that needs to go.

Wasn't 330 Madison recently re-clad? That type of capex doesn't bode well for a redevelopment. At these prices it would be extremely hard to make the economics work for a redevelopment of a productive office asset, even if you are building supertall.

[suburbanite]

Originally Posted by Crawford

It's for the asset. The structure is landmarked. No way could they build on top, except for maybe a small landmarks-sanctioned penthouse hidden from the street.

Most Midtown Class A buildings get north of $100 psf, and the lower (retail) floors probably get (blended) like $1,000 psf (so ground floor much higher). And these types of buildings aren't bought for amazing returns; they're a safe place for jittery money.

I've looked at some prospective Manhattan purchases but ~$3,000 psf still seems insane to me. It doesn't even look like it's fully leased and that vacancy had to be priced into the first $909 million sale. Basically implying it's a billion dollar building at full occupancy!

I know Manhattan office leasing is tightly held by traditional brokerages so I don't really trust any public online listings, but the one with recent activity shows a decent chunk of vacant space marketed at $90 psf. There must be a much higher proportion of retail space than initially appears since the valuation is closer to what I saw for the Saks flagship store.

[Crawford]

Originally Posted by suburbanite

I've looked at some prospective Manhattan purchases but ~$3,000 psf still seems insane to me. It doesn't even look like it's fully leased and that vacancy had to be priced into the first $909 million sale. Basically implying it's a billion dollar building at full occupancy!

The retail drives the valuation. Again, this is Fifth Ave, which, alongside Madison, generally has the most expensive retail space on the planet.

Inditex (Zara parent) paid $8,300 psf for their large retail condo at 660 Fifth Ave, which is two blocks away. And the east side of Fifth typically gets slightly higher rents than west side. So the Coca-Cola deal doesn't sound unreasonable.

Chanel, BTW, paid $25,000 psf for their SoHo retail condo, and $31,000 psf for their Madison Ave. retail condo, though these are smaller condos than the Zara condo. Prime Manhattan retail spaces have incredible valuations.

Bulgari, BTW, pays $5,500 psf to lease, just a block north of the Coca-Cola building. That's insane, and makes the retail condo sales look reasonable.

[iheartthed]

Originally Posted by Crawford

It's for the asset. The structure is landmarked. No way could they build on top, except for maybe a small landmarks-sanctioned penthouse hidden from the street.

I just looked on the LPC website and it doesn't appear to be landmarked. Actually, surprisingly little on Fifth Avenue around there is landmarked.