The sky's the limit.
Industry expansion, especially in t.he entertainment, publishing and computer related fields, has helped create a demand for increased square footage. Capital expansion has resulted from the increased yields being realized by New York City real estate and the philosophical buoyancy in the economic expansion of the New York City commercial market. New York is perceived as a "booming" and growing city.
With record growth in the securities and insurance industries, demand for Grade A space rose drastically as tenants scrambled for diminishing inventory. According to the New York Times (January 11, 1997, Real Estate Section), vacancy rates in Class A office buildings in Midtown fell to 8.5 percent in December, compared to almost 12 percent a year earlier. With absorption of more than 6.45 million square feet (according to Grubb & Ellis' 1998 Real Estate Forecast), Midtown Manhattan witnessed a sharp rise in asking rents to over $40 per square foot.
Midtown South is gaining further acceptance as a corporate business location as, due to the drop in vacancies and high rents in Midtown, focus turns to this more affordable and lively neighborhood, as well as Downtown Manhattan and the upcoming Metrotech in Downtown Brooklyn.
As with many of our prior acquisitions, we are investing in an emerging, changing neighborhood (Times Square) and are helping to create the revitalization of a major commercial thoroughfare. We are scheduled to add signage to our property at 729 Seventh Avenue with a sign measuring 60' x 60' by the end of the year, adding to the image and excitement of Times Square. As Landauer noted in their 1998 Real Estate Forecast, "Times Square is, perhaps, a fitting symbol of Manhattan's revival, with the new Conde Nast office tower the first significant development in nearly a decade."
In addition, construction commenced on the Durst Organizations' 47-story, 1.6 million square-foot office tower at Four Times Square, already more than 85 percent pre-leased to Conde Nast and Skadden Arps; and Reuters, the British media company, announced plans to build its new 850,000 square-foot headquarters at 42nd Street and Seventh Avenue.
Himmel + Meringoff Properties' current ownership portfolio consists of over 2 million square feet of office, retail and industrial space in New York City. We are a vertically integrated organization with its own leasing, construction and management staff. Entering 1998, Himmel + Meringoff Properties remains bullish and is aggressively pursuing new acquisition opportunities in order to build upon our existing portfolio. Being a private company, we respect the confidential nature of potential sales. Our purchasing strength lies not only in our ability to close quickly with readily available cash, but also in our ability to creatively structure transactions, i.e. with joint venture, net lease with option to buy, partial sale-leaseback and tax-free exchanges. Enlivened by the booming real estate market, we welcome and look forward to lenders, sellers and brokers to bring sales opportunities to our door.
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|Title Annotation:||Supplement: Annual Review and Forecast, section 1; real estate industry opportunities|
|Author:||Himmel, Leslie Wohlman|
|Publication:||Real Estate Weekly|
|Date:||Jan 28, 1998|
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