Manhattan Office Market Mixed [Housing Tracker]

Office Properties, Commercial Real Estate and Real Estate Investment Trusts [REITs]

HRPT Finalizes Cleveland Office Complex Acquisition. “HRPT Properties Trust has closed on the acquisition of the 877,000-square-foot North Point office complex in Downtown Cleveland, Ohio. All together, the two-building property sold for $123 million, or about $140/sf.” (CPN, June 10th)

Manhattan Office Vacancies Rise. “Brokerage Colliers ABR: Manhattan Class A vacancy rate rose to 6.9% in May, up from 6.4% in April and 5.3% at the beginning of the year. After JP Morgan and Bank of America added large blocks of office space, Midtown's vacancy rate increased to 7.1%. Downtown, the vacancy rate increased to 6.3% from 5.9% in April, as Goldman Sachs put its offices on the market in preparation of its move to a new tower in Battery Park City. Midtown South saw improvements, and their vacancy rate fell to 9.9%, the first time it's been below 10% since January.” (The Real Deal, June 10th)

Soho Buildings Trade For $21 Million. “Real estate developer Cape Advisors sold two adjacent landmarked commercial buildings in Soho for a total of $21.5 million, $8M more than it paid for them in 2007 and 2006, according to city property records. Cape Advisors sold the four-story 150 Spring Street for $10M to a company affiliated with Vornado Realty Trust, while 148 Spring Street, also four stories, was sold for $11.5M to a company that was not identified.” (The Real Deal, June 10th)

AIG Takes 800,000-SF Sublet Deal Downtown. “American International Realty Corp., the real estate arm of American International Group Inc., has completed a lease assumption agreement with Goldman Sachs Group Inc. to sublease approximately 800,000-sf at 180 Maiden Ln… Despite some rumors of its headquarters at 70 Pine St. potentially on the block, sources say that "the rumor is unfounded" and AIG will not be selling. "It will remain the company's headquarters." (Globe St., June 10th)

Millenium Tower Purchased. “San Francisco-based RREEF North America recently sold the 353,461-square-foot, 14-story, class A office building Millennium Tower in Dallas, Texas, to KBS REIT. [bringing the] REIT's Dallas/Fort Worth portfolio to 792,539-sf. The property includes 3.34 acres and a six-level parking garage with a parking ratio of 3.7/1,000-sf. It also has an on-site café, bank and property management office. At the time of purchase, the property was 87% leased to tenants that included Dresser Inc., SAS Institute, UnumProvident Corp. and HBO Time Warner.” (Inman News, June 9th)

Real Estate Still Has Room for Growth. “Steve Burton, portfolio manager of ING International Real Estate (IIRIX), [which] ended the year in the top 2% of all real-estate funds tracked by Morningstar: “We like the dominant mall companies [like Simon Property Group (SPG) and General Growth Properties (GGP).] Simon… owns in excess of 20% of the class A malls in the U.S… Simon stock is trading at [a] significant discount to… the underlying real estate [value.] Retail… as represented by fortress malls -- tends to hold up well during periods of economic slowdowns… We've peeled back in Vorando Realty Trust (VNO) on concerns that it does have a large presence in Manhattan offices and sentiment in offices has been poor.” (Barron’s, June 9th)

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