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Sunday, November 09, 2008

"A microcosm" of CRE in New York

by Calculated Risk on 11/09/2008 07:24:00 PM

Charles Bagli at the NY Times provides some details for one building in New York: Market’s Collapse Echoes in a Manhattan Tower

The first sign of trouble came over the summer when iStar Financial, a real estate finance company, decided not to move into the 100,000 square feet of space ...

Several weeks later, Metropolitan Life Insurance ... quietly began shopping for tenants to sublease 100,000 square feet ...

And last month, Centerline Capital Group, a suddenly struggling commercial property finance and investment company, confirmed that it would not be moving into its 100,000 square feet ...

The companies signed leases for as much as $132 a square foot ... many brokers say they would be lucky to get $95 a square foot today.
Sublease space really hurt the NY office market in previous downturns, and it appears to be happening again.