Colliers ABR predicts solid NYC growth Manhattan's healthy office market is destined to keep growing through 1998, according to the 1997 Spring Barometer released by Colliers ABR's research division, New York. Decreasing vacancies, rising rents and lack of new construction are all positive factors. Overall Class-A vacancies are expected to trend below 13.5% this year, with Midtown predicted to trend down. Robust leasing activity will occur in the next 12-24 months. Downtown vacancies, which stood at 16.1% at year-end 1996, will continue to improve.
Manhattan rental prices will continue to rise in 1997, but look for more caution in 1998 as new construction starts are anticipated to steady rents. Midtown ended 1996 at $31.56 per sq. ft., but some of the top-of-market properties were fetching $60 per sq. ft.
Suburban office growth explodes More cranes are appearing on today's skylines than have been seen since the 1980s. But most of the new crop of suburban buildings have one thing in common -- they're not gargantuan. Many, however, are 100% speculative, and they do seem to be getting larger as land prices move up.
Daewoo affirms plans to build China tower, world's fifth-tallest Daewoo Corp. of Korea has hired John Portman & Associates, Atlanta, to design/build the fifth-tallest tower in the world as Daewoo's landmark complex in China. The 4 million sq. ft. Shanghai Daewoo Business Center will feature a 92-story hotel/office tower plus a 37-story luxury apartment tower, a nine-story department store and specialty retail and entertainment galleria. The 92-story tower combines 60 levels of Class-A office space with a 500-room luxury hotel. Construction should start later this year, with completion scheduled for 2001.
LaSalle tapped to sell L.A.'s landmark Fox Plaza tower Known best as the building that blew up in the original Die Hard movie, Los Angeles' 34-story Fox Plaza is now up for sale. Two of Chicago-based LaSalle Partners' commingled funds have tapped the firm to solicit all-cash offers for the property, which could fetch one of the country's highest sales prices in 1997. No asking price is set. Situated in the heart of the tight Century City market, Fox Plaza is 10 years old, nearly 98% occupied by blue-chip tenants and has commanded recent gross rents exceeding $50 per sq. ft. The pending sale is yet another example of an owner wanting to cash in on the country's dramatically improved office markets.
In work on the East Coast, LaSalle Partners recently signed two leases totalling 212,000 sq. ft. at 335 Madison Avenue in New York City. And the investment banking group sold the loan on 90 Park Avenue for $185 million on behalf of Sumitomo Trust & Bank Co. to The Medik Co.
Opus North breaks ground on Downers Grove spec building Opus North Corp., Rosemont, Ill., has broken ground on the eight-story 260,000 sq. ft. phase II of Highland Landmark in Downers Grove, Ill. This is the second building in the 42-acre park. Completion of the 270,000 sq. ft. phase I building is scheduled for this October. The eight-story phase II building is scheduled for occupancy in July 1998. The Highland Landmark park is a joint venture between Opus North and Aldrich Eastman & Waltch, Boston.
Crescent pays $162 million for Trammell Crow Center In the largest downtown Dallas office building sale since 1989, Houston-based Crescent Real Estate Equities has paid $162 million, or $147 per sq. ft., for Dallas' landmark Trammell Crow Center. Crescent bought the note on the 49-story, 1.1 million sq. ft. tower, originally erected in 1984 as the LTV Tower, from the sellers, the Teacher Retirement System of Texas (TRS) and the California Public Employees' Retirement System (CalPERS). GE Capital Investment Advisors served as the real estate investment manager for TRS and advised the Austin-based pension fund. The transaction closed in 60 days.
N.Y.'s MTA selects five finalists for Columbus Circle project It's now down to just five development teams as to who will win the rights to build on one of America's most high-profile land parcels, at Columbus Circle on 59th Street and Central Park West in Manhattan. The Metropolitan Transportation Authority (MTA) has selected five finalists for the next round of consideration, including The Trump Organization in partnership with Colony Capital, Columbus Circle Associates (Forest City Ratner, Daniel Brodsky and Peter Lehrer), ColumbusCentre Partners (The Related Cos. and Himmel and Co.), Tishman-Speyer/Mirage/Morgan Stanley Partners, and Coliseum Development Partners (Millennium Entertainment Partners, Whitehall Street Real Estate Limited Partnership VII, Starwood Capital Group and Vornado Realty Trust).
Only a week after the finalists were named, Mayor Rudolph Giuliani withdrew the tax incentives that were originally designed to go to the winning developer, a move which caught the finalists by surprise.
TIAA, USF&G form venture for eight-building portfolio Teachers Insurance and Annuity Association (TIAA) Real Estate Account, New York, and USF&G Realty Advisors, Baltimore, have formed a new joint venture called Light Street Partners LLP to take over an eight-building suburban office portfolio valued at $164.5 million. The properties are located in eight states, have a total of 1.3 million sq. ft. and are 90% leased.
Greystone/SITQ Immobilier join to buy in downtown D.C. Greystone Realty Corp. of Stamford, Conn., has acquired a 50% interest in Republic Place, a 10-story Class-A office building at 1776 Eye Street in Washington, D.C., for a joint venture that aligns New York Life Insurance Co. and the Canadian pension giant SITQ Immobilier with The Kiplinger Washington Editors, a publishing company. Greystone is investing roughly $8.3 million and will co-own the building with Kiplinger and other partners.
If you have development or leasing news about the office industry, please e-mail it to NREI Editor Ben Johnson at [email protected].