Ivanhoé Cambridge pays $650m for Manhattan office
Ivanhoé Cambridge and its partner Callahan Capital Properties have acquired 85 Broad St. located in Downtown Manhattan for approximately $650 million.
85 Broad St. is a 1.1 million-square-foot office tower situated on the full block of Broad Street between South William and Pearl streets. With 115 feet of frontage along Broad Street, the property stands 30 stories tall.
The Manhattan office market was highlighted by positive absorption and strong leasing activity in the first quarter of 2017, according to Cushman & Wakefield. New leasing activity totaled 7.6 million square feet, 16 percent higher compared with this time last year. Downtown accounted for the largest spike in activity and captured three of the five largest Manhattan new leases of the quarter. Manhattan renewal activity totaled 3.4 million square feet, boosting total leasing to a first-quarter 17-year high of 11 million square feet. Manhattan’s overall vacancy ticked up by 20 basis points to 9.4 percent during the quarter, triggered by a 27.8 percent increase in available sublease space, the bulk of which occurred in Midtown South. Manhattan posted 876,284 square feet of positive absorption in the first quarter of 2017, a result of above-average Midtown and Downtown leasing offsetting an increase in available space.
Larger properties are due to come online in 2018 with 3 World Trade Center (2.9 million square feet) and 55 Hudson Yards (1.6 million square feet) set to deliver, with a combined 2.4 million square feet currently available.
In Manhattan there were 149 properties traded in the first quarter 2017, a 19 percent drop compared with the 185 properties sold during the first quarter 2016, reported Cushman & Wakefield. The first quarter was impacted by the lack of marquee deals and weaker foreign participation. However, the investment sales pipeline looks promising heading into the second quarter and includes the pending acquisition of 245 Park Ave. for $2.2 billion by China’s HNA Group. This deal, announced at the end of March, is more than 1.6 million square feet
The first quarter of 2017 office sales in New York City totaled 846 properties for a dollar volume of $7.06 billion, according to Cushman & Wakefield. It was a drop of 33 percent from the 1,258 properties sold the same time a year ago, and a 55 percent decline from the $15.52 billion of deals inked in the first quarter of 2016.