The Washington Mutual Center, a 42 story office tower at 1301 Second Ave, in downtown Seattle ( see photo) was sold to Northwestern Mutual Life Insurance Company for $115 million or $132.psf. Ouch!
"This bargain-basment price," per the NY Times,( 9-16-09) "reflects the dismal state of the Seattle market where no major office building has sold in nearly 2 years."
"Vacancy rate was 14.4% and about 3.6 million SF are now under construction. More than 50% of the WMC building was vacant!
New York City. Deutdhe Bank purchased Worldwide Plaza 49th & 50th streets, It was sold for $590.3 million and has 1.06 million SF of area.
It was "valued" at $1.9 billion or $1,000 PSF when purchased by Macklowe in 2-2007. The building's value dropped to $369 psf. 781,00 SF are empty.
Owners of One California Plaza, a 42 story building at 300 South Grand Ave in LA are "taking a haircut," The building is in contract to be sold at $225 million or about $225.psf. The seller paid $325 a SF for 80% ownership in 2006. One fifth is empty
New York City. In August 70 Pine St and 72 Wall St sold for $150 million or abound $100.psf.
The headline in today's New York Times, Commercial Real Estate Section:
"Vacancies Raise Risks and Lower Value for Landlords"
The sales data above says it all! Some, greatly over-leveraged and, now fully or partially vacant, commercial properties are going for discount prices.
Is this the bottom? Many think not.
BIll McInerney
COmmercial Realtor
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