New York City is For Sale: A Buyer’s Paradise
The City’s Most Iconic Buildings in the Firing Line
New York City, known for its iconic skyline, is now available for sale – and at bargain basement prices. The market’s changed, and the era of unaffordable deals is behind us. As a result, even the city’s most celebrated buildings won’t escape the clutches of eager buyers.
Chrysler Building: The Latest Scion to Fall
The Chrysler Building, a landmarked Art Deco skyscraper, may soon revert to its former glory days. In 2019, Aby Rosen’s RFR Holding acquired the building for a staggering $75.5 million, pouring in $150 million to revive the structure. However, the bargain sale didn’t include the building’s ground, owned by Cooper Union. With the ground rent growing from $7.8 million to $41 million by 2028, RFR is struggling to maintain occupancy levels. Cooper Union is now fighting to evict RFR and is working with Cushman & Wakefield to manage the tower, which sits at just 60% occupancy. The legal battle is a testament to the precarious state of New York City’s property market.
Falling Prices, Rising Fears
Industry experts warn that without a significant rent reduction, no one can afford the needed renovations to lure in new tenants at higher rents. Cooper Union’s consent decree requires it to slash expenses and reinstate free tuition, but that necessitates more than $50 million annually. With RFR’s lease termination looming, the parties are locked in a court battle, refusing to comment.
Not the Only One in Trouble
Charles Cohen, another embattled owner, faces similar woes. Cohen’s Tower 57, a curvaceous office building on 135 E. 57th Street, was slated for residential conversion, but he has stopped paying rent, as well as property taxes. A state judge has given Cohen the boot, and the property is being marketed by JLL, with all offers considered. Fortress, Cohen’s lender, is pursuing a UCC sale of his properties and a $187 million guarantee for a $534 million mortgage he stopped paying this year. "[The market] has transitioned from hibernation to full-throttle action. People will transact for FOMO – fear of missing out. We’re at the bottom, and this is the best time to buy in 15 years," says Adelaide Polsinelli of Compass.
The Big Thaw: A Buyer’s Paradise
As the market continues to thaw, land is becoming more accessible, and many are snatching up properties at bargain prices. "[There’s] a lot clearing out for lenders, and they want to move on from these properties," says Scandalios, who is handling the sale of 135 E. 57th Street. Old, rent-regulated residential buildings and office inventory, once worth $100 million, can now be purchased for as little as $30 million to $50 million. Lenders are growing aggressive in shedding their bad debts, and this is opening doors for bold buyers.
Opportunistic Buyers Eye a New Era
For those seeking a permanent home for their businesses, this is the opportunity of a lifetime. "We’re seeing a lot of buy-side energy, and people want to deploy capital," says Scandalios. "User-buyers range from fashion and public service organizations to auction houses and financial firms that want to control their own destiny," adds Doug Middleton of CBRE. "It’s a bit of a herd mentality, and they want to make sure they control the physical location in a prime space and will not get outbid in the future,"
Residential Conversions and Office Renovations
Buyers are also targeting obsolescent office buildings for residential and hotel conversions. "It’s expensive to take down buildings. It can add up to a lot. That is why they are trying to convert the existing structures," says Darcy Stacom of Stacom CRE. This is evident in Vanbarton’s plans to buy 77 Water Street for $95 million, which is being marketed by Eastdil Secured on behalf of the Kaufman family company, Sage. The building is set to be converted into residential units.
Conclusion
As the market continues to shift, New York City’s most iconic buildings are being sold at bargain prices. While this may seem daunting to some, savvy investors see an opportunity to buy low and sell high. As the dust settles, the city’s real estate landscape will undergo a significant transformation, and those who seize this moment will reap the rewards.
FAQs
- What is happening to New York City’s property market?
New York City’s property market is experiencing a significant shift, with buyers snatching up properties at bargain prices and sellers struggling to maintain occupancy levels.
- Who is buying up these properties?
Opportunistic buyers, including fashion and public service organizations, auction houses, and financial firms, are seeking out these once-prized assets at discounted prices.
- What are the advantages of buying now?
Buyers are getting more bang for their buck, as prices have dropped significantly, making it a buyer’s market.
- What’s happening to the Chrysler Building?
The Chrysler Building, once a crown jewel, is now at risk of reverting to its former glory days due to rising ground rent and declining occupancy levels.
- Are prices likely to rise?
Industry experts believe that as the market recovers, prices will rise, but for now, buyers are getting a rare chance to snap up properties at discounted rates.
