Commercial real estate crash: NYC office to sell at 67% discount
How does the agreed sale price compare to the original purchase price in terms of percentage?
The agreed sale price of the New York City office building at 321 W. 44th St. is less than $50 million, while the original purchase price in 2018 was nearly $153 million1. This represents a roughly 67% discount from the original purchase price.
What was the original purchase price of the office building at 321 W. 44th St. by Related Fund Management in 2018?
What is the reason for the steep discount in the sale price of the office building?
The steep discount in the sale price of the office building at 321 W. 44th St. in New York City is due to the decline in office property valuations caused by rising borrowing costs and decreased demand as remote work increased. The building was sold in a short sale, meaning the owners and lenders agreed to sell it for less than the outstanding amount on the mortgage. This type of sale has become more common in the office sector as property values have fallen below loan amounts. The market for office properties has been challenging, particularly for older buildings that struggle to attract tenants.