In a move that’s turning heads on Wall Street, American Strategic Investment Company (ASIC) is set to offload 9 Times Square for $63.5 million, a fraction of its 2014 purchase price of $162.3 million.
This eye-watering loss isn’t just a blip on the radar – it’s a glaring signal of deeper issues plaguing New York City’s real estate market and overall economic health.
ASIC’s CEO, Michael Anderson, claims the sale will net $13.5 million, a statement that’s left many scratching their heads given the basic math.
This puzzling arithmetic aside, the sale is part of a larger strategy to cut ties with Manhattan real estate.
ASIC is also looking to unload properties at 123 William Street and 196 Orchard Street, which would slash their Manhattan portfolio by a whopping 67%.
But why the fire sale?
Look no further than the city’s dire office vacancy rates.
City Comptroller Brad Lander’s recent report shows vacancies have nearly doubled since early 2020.
By selling 9 Times Square, the American Strategic Investment Company hopes to diversify out of the troubled Manhattan office market – a sign that commercial real estate has not fully recovered.https://t.co/FiyVgOWrUD
— The Real Deal (@trdny) June 27, 2024
This isn’t just about remote work trends – it’s a symptom of New York’s broader decline under a decade of questionable leadership.
The numbers don’t lie: rising crime rates, visible homelessness, and an influx of undocumented immigrants have transformed the Big Apple into something resembling Gotham City.
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These issues aren’t just talking points – they’re directly impacting the bottom line for real estate investors and businesses across the board.
ASIC’s pivot to “higher-yielding investments beyond Manhattan real estate” speaks volumes.
It’s not just about diversification – it’s about getting out while they still can. The question now is: will other investors follow suit?
For those keeping score, ASIC still has six other NYC properties, including 1140 Sixth Avenue, with a total portfolio value of $725.5 million.
But with this Times Square property selling at such a steep discount, one has to wonder about the true value of their remaining assets.
The takeaway?
New York’s real estate market is sending distress signals that investors can’t ignore.
Without a major course correction in city management and policy, we might be witnessing the early stages of a more significant exodus from what was once considered the world’s premier real estate market.
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New York City needs to address its fundamental issues, and fast, or risk watching its prime real estate transform from golden geese to albatrosses around investors’ necks.
