The Cost of Office Real Estate

A daily mix of stories about cities, city life, and our always evolving neighborhoods and skylines. [Curbed]( MONDAY, JULY 17 OFFICE APOCALYPSE [New Glut City]( The city’s mega-office landlords are panicking, pivoting, and shedding what’s worthless. One opens his books. Photo: Jeff Chien-Hsing Liao Every time the real-estate market crashes, people say, “This time is different.” When there’s distress all around, it’s hard to grasp how there could ever be an upside. But with the benefit of hindsight, you can see that if you’d had enough money when things got bad, you could have made a killing by taking the other side of the bet. Let’s go back to 2009. There was calamity as far as the eye could see: bank bailouts, paralyzed credit markets, a toxic heap of mortgage debt crushing the world economy. Scott Rechler, having fortuitously sold his family’s real-estate company at the top of the market to a competitor for $6 billion, decided it was a good time to go shopping for office buildings. After raising more money from sovereign wealth funds, other institutional investors, and wealthy private individuals overseas, he went on an opportunistic buying spree. Over three years, he spent $4.5 billion on Manhattan office acquisitions. By 2020, his company, RXR, was a major office landlord with more than 22 million square feet of space in the city. Today, three years after the pandemic emptied office buildings nationwide, Rechler has been forced to reckon with the possibility that the buildings that were worth so much not so long ago may now not even be worth keeping. Corporate tenants are typically locked into multiyear leases, which guarantee stability in the commercial real-estate market for a time. But every month, more leases expire, giving tenants an opportunity to rethink their space, and every day, employers are staring at empty desks. Many companies, which had been trying to squeeze more workers into less space for years, are not renewing. That leaves an office landlord facing hard choices. What should Rechler do, for instance, with [5 Times Square](, a million-square-foot building that 20 years ago was a gleaming centerpiece of 42nd Street’s revival? After the departure of its longtime anchor tenant and major renovations, it’s currently close to empty. [Continue reading »]( [Learn more about RevenueStripe...]( The Latest [The Teetering Tech Office Meta and Twitter are shedding square footage, while Amazon and Google aren’t giving up the dream.]( By Adriane Quinlan [A Typology of Unwanted Manhattan Office Buildings Certain kinds of properties are more doomed than others. Here, four case studies.]( By Kim Velsey and Ian Volner [Three Bleak Blocks of Third Avenue What the office-space crisis has looked like for one stretch of the Upper East Side.]( By Kim Velsey [The Gilgo Beach Murder Suspect Was a Busy New York Architect Rex Heuermann’s clients included Cipriani, Target, and Nike.]( By Christopher Bonanos [Learn more about RevenueStripe...]( [Read More From Curbed]( Introducing The City Desk, a weekly newsletter about New York. [Sign up to get it every Thursday](. [GET THE NEWSLETTER]( [logo]( [facebook logo]( [instagram logo]( [twitter logo]( [unsubscribe]( | [privacy notice]( | [update preferences]( This email was sent to {EMAIL}. Was this email forwarded to you? [Sign up now]( to get this newsletter in your inbox. [View this email in your browser.]( You received this email because you have a subscription to New York. Reach the right online audience with us For advertising information on email newsletters, please contact AdOps@nymag.com Vox Media, LLC 1201 Connecticut Ave. NW, 12th Floor Washington, DC 20036 Copyright © 2023, All rights reserved