It Doesn’t Hurt to Ask

Or does it? Manhattan office landlords are still asking sizable rents in many cases. But a surfeit of concessions due largely to uncertainty in the market is ensuring that taking rents are the lowest in a long while. Meanwhile, good news for investors: There’s money out there for office acquisitions under the right conditions.

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— Tom Acitelli, Co-Deputy Editor

Manhattan Office Tenants Save Big at Pricey Towers as Concessions Mount

They say it never hurts to ask. But at Manhattan’s high-end buildings, high asking rents aren’t helping much. Landlords listed roughly 13.4 million square feet of Manhattan office space at asking rents above $100 per square foot in 2022, the most in a single year since 2016, according to CBRE data. The first quarter of 2023 saw 28 deals with starting rents of $100 per square foot or more, above the five-year quarterly average of 25 deals, though a 12.5 percent slip from the fourth quarter’s total. But, while the amount of high-priced space has risen, so have concessions. “Over the last 15 years for a new lease, the amount of free rent has more than doubled,” said Frank Wallach, executive managing director of research and business development at Colliers.

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Citigroup, BMO Lead $280M Acquisition Loan on Jersey City Office Buy

Real estate investment group 601W Companies has sealed $280 million of acquisition financing for its purchase of three Jersey City office buildings that fetched a surprise profit, Commercial Observer has learned. Citigroup and Bank of Montreal (BMO) supplied $225 million in senior financing — which will eventually be securitized — while Meritz Securities provided $55 million of mezzanine debt on Harborside Financial Center Plaza, which 601W acquired in early April for $420 million from Veris Residential. The developer initially acquired the properties for $293.7 million in 1996 from AT&T when it was known as Mack-Cali Realty Corporation.

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