Author Topic: the death of the urban office building  (Read 19423 times)

Gregmal

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Re: the death of the urban office building
« Reply #120 on: August 29, 2020, 09:06:57 AM »
https://nypost.com/2020/08/28/madison-square-garden-to-be-a-2020-voting-site-starting-oct-24/


Hmmm. We can open the Garden for political reasons, but not for business as usual....thats the current state of NY, and probably what I'd expect it to be for the next few months.



fareastwarriors

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fareastwarriors

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Re: the death of the urban office building
« Reply #123 on: September 01, 2020, 08:19:20 AM »
Aby Rosen buys Midtown office building for $350M

RFR seeking to lease 522 Fifth Avenue to a single tenant

https://therealdeal.com/2020/09/01/aby-rosen-buys-midtown-office-building-for-350m/

Aby Rosenís RFR just closed on a 23-story, 575,000-square-foot office tower in Midtown Manhattan for $350 million. Morgan Stanley sold the property at 522 Fifth Avenue, which it used as its headquarters for its wealth management division.
...
In April, Rosen considered but decided against buying 900 Third Avenue in Midtown from Paramount Group for $400 million and a retail condo at 1600 Broadway in Times Square that was on the market for more than $200 million, according to Business Insider.

LearningMachine

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Re: the death of the urban office building
« Reply #124 on: September 01, 2020, 11:30:41 AM »
Aby Rosen buys Midtown office building for $350M

RFR seeking to lease 522 Fifth Avenue to a single tenant

https://therealdeal.com/2020/09/01/aby-rosen-buys-midtown-office-building-for-350m/

Aby Rosenís RFR just closed on a 23-story, 575,000-square-foot office tower in Midtown Manhattan for $350 million. Morgan Stanley sold the property at 522 Fifth Avenue, which it used as its headquarters for its wealth management division.
...
In April, Rosen considered but decided against buying 900 Third Avenue in Midtown from Paramount Group for $400 million and a retail condo at 1600 Broadway in Times Square that was on the market for more than $200 million, according to Business Insider.

Wondering if anyone knows how the quality of square footage of VNO, PRGE and ESRT compares to Morgan Stanley Headquarters at 522 Fifth Avenue trading at $609 PSF?

thepupil

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Re: the death of the urban office building
« Reply #125 on: September 01, 2020, 01:38:19 PM »
I don't want to make too much of one data point, but I'd say its a generally postive comp. It's a well located, but very old building that was last renovated substantially in 1998 according to what i can find. I assume there will be substantial rehab/capital to invest in addition offset by the income from MSIM's rent.

it looks like some of ESRT's assets or maybe PGRE's 712 Fifth (but 712 Fifth looks nicer/higher rent), unless i'm missing something where they were renovated substantially. I could be wrong and this is testing the limits of my understanding the nuances of NYC office.

Morgan Stanley wants to be in a more modern space.

without knowing the economics of the leaseback it's hard to conclude much though. 

http://wikimapia.org/169522/522-Fifth-Avenue

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318-foot, 23-story office building originally completed in 1898 as the 11-story Sherry Hotel. Designed by McKim, Mead & White, it was converted to offices in 1919. It was the scene of notorious parties while the Sherry Hotel: At one held by C.K.G. Billings in 1903 to celebrate the opening of his stables, the guests sat on horseback and the waiters dressed as jockeys. James Hazen Hyde, vice president of Equitable Life Insurance, spent $200,000 of his company's money here at a party meant to recreate Versailles; public outrage forced Hyde to flee the country and prompted reform of the insurance industry.

The building was extensively renovated and expanded in 1960, to designs by Eggers & Higgins, with a setback ziggurat peak rising to 23 stories. The building was renovated again in 1996 to a design by Sydness Architects, when the sole tenant was still JP Morgan, and a new base by Gensler Architects was constructed in 2016, except for at the west end on 44th Street. On the Fifth Avenue side, the building is distinguished by a landmark clock and a grand colonnaded entrance foyer illuminated by tiered iron chandeliers. It was reclad in 2018.

The modern 2-story base is clad in a glass curtain wall with clear panes exposing pale-green paneled piers. Beige metal panels run across the tops of the 1st & 2nd floors. The main entrance is at the center of the east facade on 5th Avenue. The western bays on 44th Street are clad in light-grey granite with light rustication. There is a service entrance is the westernmost bay and a loading dock in the next bay to the left, both with brown metal louvers at the 2nd floor.

The upper floors are clad in limestone, with rows of single-windows in silver metal frames. The western two bays on the north facade set back above the 10th floor, with the rest of the building setting back above the 11th floor. In the western two bays, the windows are replaced by metal louvers at the 3rd & 4th floors, and also at the 3rd floor in the next bay to the east. There are additional setbacks above the 14th, 18th, and 21st floor, deeper on the east facade than the north.

522 Fifth Avenue had been home to J.P Morgan since 1919, and is also currently occupied by Botticelli and Orvis, however, in 2006 Morgan Stanley executed a long-term lease of the 595,430 square foot facility to house its growing wealth management business.

https://www.cmalert.com/search.pl?ARTICLE=189592

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CMA
May 22, 2020 
RFR Seeks Debt to Buy Fifth Avenue Offices
RFR Holding is on the hunt for a $300 million loan to finance its purchase of an office condominium at 522 Fifth Avenue in Midtown Manhattan.

The New York investment shop is asking for quotes on a mortgage with a term of five years, including extensions, on the 553,000 square feet of space. That would match the lease agreement with the sole tenant, Morgan Stanley. Newmark is shopping the assignment, which has some atypical aspects that could help attract lenders in a time of economic uncertainty.

RFR, led by Aby Rosen and Michael Fuchs, agreed to buy the condo from Morgan Stanley via CBRE in early March, before the full fallout from the coronavirus pandemic became apparent. The purchase price would be around $350 million.

As previously reported by sister publication Real Estate Alert, RFR negotiated a relatively long due-diligence period, as it occasionally does, that gave it about six months to close. That was viewed as an advantage given that the commercial-property financing market had essentially frozen. It has since begun to thaw a bit, but remains spotty.

The proposed deal carries features apparently meant to ease lendersí concerns about backing a large acquisition. For example, a source said Morgan Stanley has agreed to a sale-leaseback arrangement that includes a full corporate guarantee of its rent for up to five years. However, either RFR or the investment bank can cut the lease short, at 3.5 years, if they choose. RFR intends to lock in one or more tenants to take all of the space before the term is up.

In addition, the proposed structure includes an unusual cash sweep that, for a period of time, would direct income from the property toward reducing the balance of the loan.

Morgan Stanley uses the property as the headquarters for its investment-management division. It bought the 23-story building from Broadway Partners in 2007 and divided it into office and retail condos in 2014. That year, it sold the 27,000 sf of retail space on the first two floors for $165 million to a partnership including Ashkenazy Acquisition of New York and German investor Deka Immobilien. That space has remained vacant. The bank listed the office portion around the beginning of the year.

The property is at 44th Street, one block north of Bryant Park and two blocks west of Grand Central Terminal. It was constructed in 1896 and opened as the Sherry Hotel. It was later converted to offices, and heavily redeveloped in the 1960s.
« Last Edit: September 01, 2020, 01:53:04 PM by thepupil »

thepupil

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Re: the death of the urban office building
« Reply #126 on: September 01, 2020, 02:01:18 PM »
https://rew-online.com/rfr-closes-on-350m-deal-for-522-fifth-plans-custom-office/

more details here. the building is described as a "blank canvas" where they are looking to custom design the whole property for a single tenant for 2024 lease.

tough to compare this with other space.
« Last Edit: September 01, 2020, 02:04:20 PM by thepupil »

cherzeca

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Re: the death of the urban office building
« Reply #127 on: September 01, 2020, 02:09:47 PM »
https://rew-online.com/rfr-closes-on-350m-deal-for-522-fifth-plans-custom-office/

more details here. the building is described as a "blank canvas" where they are looking to custom design the whole property for a single tenant for 2024 lease.

tough to compare this with other space.

German money (Rosen) is long long long term money.  I remember reading that the polo flagship store site on 72/mad was long term leased at a 6% rate...this was a long time ago when 6% was meh.  turned out to be a smart move

LearningMachine

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Re: the death of the urban office building
« Reply #128 on: September 01, 2020, 04:23:39 PM »
I don't want to make too much of one data point

Agreed, pupil, we shouldn't read too much into this one data point, and that too from mid-March 2020.   Good to know though that was the price for "blank canvas" at that moment.

fareastwarriors

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Re: the death of the urban office building
« Reply #129 on: September 02, 2020, 01:05:11 PM »


Got space? Manhattan office availability hits 7-year high
Leasing down 21% in August as sublet space dilutes market

https://therealdeal.com/2020/09/02/got-space-manhattan-office-availability-hits-7-year-high/?utm_source=internal&utm_medium=widget&utm_campaign=feature_posts