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Manhattan’s office market is facing its highest availability rate since 2004 as the fallout from the pandemic continues. 12.9% of office space in the borough was available in October, the fifth consecutive month that its availability rate increased. Average asking rents dropped to $76.20 per square foot, down from $77.12 in September and from $79.61 in October 2019. Subleased space accounted for 23.9% of Manhattan's total availability, its highest share since 2009. Leasing activity, however, did tick up compared to September, increasing from 1.12 million square feet to 1.76 million square feet. But this was still down dramatically from the 3.89 million square feet leased in October 2019.
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Noom, a New York-based weight loss app developer, is moving to Manhattan’s Far West Side. The company has signed an agreement to take 113,000 square feet of office space at Brookfield Property Partners’ 5 Manhattan West, which it will sublease from advertising agency R/GA. Noom’s COO, Adam Fawer, said in a statement that the company is “growing rapidly and hiring considerably,” and will move its headquarters to the Manhattan West location “when we return to working in-person.” Noom’s headquarters is currently located in Chelsea, and the company also has offices in Seoul and Tokyo.
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Some of the most conservative real-estate funds are suffering from falling property values, putting their fund managers in a tough spot as investors look to cash out. These real-estate investment vehicles are known as “core” funds because they buy higher quality properties and limit their debt. The biggest core funds have raised billions of dollars from pensions and other institutional investors that seek steady, lower risk returns. Now that the pandemic has caused values of hotels, retail properties and even many office buildings to tumble, investors are lining up to cash out of these funds. That has put fund managers in a bind: They either have to sell property into a stormy market to raise that cash or tell investors they can’t get some or all of the money they want back. The San Diego Employees Retirement System tried to redeem about $85 million from the $9.5 billion AEW Core Property Trust in the first quarter, but its consultant said it has received only a fraction of its request. “To date, 16% has been paid, and it will likely take several quarters to receive the full amount,” said a September report from Townsend Group
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The 601W Cos. is in contract to buy SL Green Realty Corp.’s 410 10th Ave. for $952.5 million, according to sources familiar with the deal. SL Green announced Wednesday that it had gone under contract to sell the Hudson Yards office building, which spans 636,000 square feet and counts Amazon and First Republic Bank as its anchor tenants. The real estate firm declined to comment on the identity of the buyer, and representatives for 601W, run by Mark Karasick and Harry Skydell, did not respond to requests for comment. The sale should close before the end of the year, and renovations on the property should be finished by the third quarter of next year. SL Green currently owns 70.9% of the building and will retain a 5% interest in it through completion of its redevelopment.
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