Despite many companies issuing return-to-office mandates , the commercial real estate market in big cities like New York remains volatile .
Iconic office towers once valued in the hundreds of millions are taking a major hit. For example, a Midtown Manhattan office building just sold at a 97.5% discount after only receiving one offer, the New York Times reported.
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A 23-story, 925,000-square-foot building, redesigned by the famed Gensler Architects team, sold for $8.5 million last week. The building last sold in 2006 for a whopping $332 million.
The office building, located at 135 West 50th Street, was built in 1963, and auctioned off by UBS on an auction website called Ten-X. It received just one bid.
"UBS's perspective was, 'We need to sell this quick, we've kind of made peace with this is gonna be a big loss. We need to sell it and we need to move on," Ten-X president Steven Jacobs told The Real Deal in an interview.
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The building has seen a slew of companies call it home over the years, including Zales and Sports Illustrated, though it's now 65% vacant due to the pandemic and companies downsizing on office space.
The building's website boasts floors that range from 12,000 to 63,000 square feet with full-floor blocks that "could serve as a building within a building for the right tenant."
However, the sale of the building does not include the land beneath it, as UBS sold that to Safehold in 2019 for $285 million.
The new owner of the building has not been revealed.
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