Another Manhattan office building took a beating this week: the value of 1140 Sixth Avenue has dropped 90 percent from $180 million in 2016 to $17.8 million today, with the value per square foot of $70 now less than former asking rents.
The owner, American Strategic Investment Co., is facing financial difficulties and a significant drop in occupancy — from 91 percent to 69 percent in 2021 — and net operating income — from $9.5 million in 2016 to $1.6 million in 2023.
The loan backing the building was transferred to special servicing in April and foreclosure proceedings began in June due to the owner’s inability to cover the ground lease; a judge approved a receiver in July.
The development joined troubles in every sector of New York City’s real estate market that dotted the news this week.
A federal court judge confirmed a reorganization plan that will end in developer Yitzchak Tessler turning over the last 10 unsold residential and two commercial units at 172 Madison Avenue to distressed debt investor ArcPe.
Tessler previously agreed to a reorganization plan where he would keep the penthouse units and secure $35 million in exit financing, but he failed to obtain the necessary funding.
ArcPe then rejected Tessler’s last-ditch effort to retain the penthouses with a new co-developer.
A Serhant team will begin to handle the marketing and sales of the remaining units after Labor Day.
An investor recently paid $28 million for the six-story retail portion of 229 West 43rd Street, occupied by the likes of Gulliver’s Gate and National Geographic before the pandemic. The buyer was a Delaware company that acquired the property from the lender.
The property formerly belonged to the Kushners, who spent $295 million to acquire the Times Square asset a decade ago. They lost the property to foreclosure last year.
And in Brooklyn, Avery Hall Investments bought a Crown Heights development site where Yoel Goldman previously dreamed of building a flashy hotel.
The developer paid $10.1 million for 1550 Bedford Avenue, which Goldman placed into bankruptcy early this year; Goldman had valued the site at $14 million.
Avery Hall principal Brian Ezra said the firm is weighing “multiple uses” for the property, which represents the latest hit to Goldman’s once mighty Brooklyn empire, which ballooned to a billion dollars before collapsing under mountains of debt, liens and lawsuits.
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Midtown Class A office tower ground lease takes 90% valuation hit
Yitzchak Tessler loses the rest of 172 Madison
Avery Hall snaps up Yoel Goldman’s stalled hotel site