Tuesday, May 27, 2014

Peak CRE

More evidence that we are getting ahead of demand.

1 WTC tenant looking to halve its commitment

The China Center, the first private-sector tenant to sign on for office space at One World Trade Center, is negotiating to halve its commitment there, according to sources familiar with the organization's real-estate decision making.
The downsizing would bring the group, which aims to give Chinese businesses a foothold in the city by providing them with offices and other amenities like conference and dining space, to about 100,000 square feet.
The firm's decision to slash its space comes after news that the owners of One World Trade Center, a partnership between the Port Authority of New York and New Jersey and the Durst Organization, were slashing asking rents in the 1,776-foot tall, more than 3 million-square-foot tower, due to a lack of demand. The Wall Street Journal reported Tuesday that the landlord reduced rental rates to $69 per square foot from $75 per square foot at the tower, which cost a record $3.9 billion to build.


It may be worthwhile to note this is on the heels of recent Chinese industrial spying kerfuffle.  Still.  Look at those numbers.  Insane.  


Rob Dawg said...

And look at that. 15 mins later somebody on HCN sees the same thing except from the WSJ. First comment on the news? "Peak Skyscraper."

TJandTheBear said...

Didn't they just recently announce a new "world's highest" project somewhere?

sm_landlord said...

S'OK, Manhattan is on its way back down the tubes. As bad as Bloomberg was, the new mayor is worse, and in the same old ways - this one may be another Dinkins.

Every time I have to go to Manhattan, I always come away wondering what the attraction is - why would anyone want to live there?

Rob Dawg said...

I have to think a Manhattan address is like an Ivy League sheepskin.

And the prices. $69 for the Freedom Tower? People think NYC is a "generator" of wealth. In truth it is a concentrator that scims wealth from the rest of the country in the process.

N.B. "scim" is a word I have made up as a cocantation of scam and skim.