Office tenants have a new question for landlords these days, “Who’s your lender?” Turmoil in the U.S. office market, which has triggered missed loan payments and foreclosure warnings, has meant prospective tenants are now taking a closer look at the financial health of property owners. The queries are an about-face for many office owners, who previously were the ones demanding information on tenants’ financial standing before inking deals.
Some Manhattan landlords are experiencing a worsening cash crunch as mortgage debt is coming due. For example, a Vornado led JV defaulted on a $450 million loan at 697-790 Fifth Avenue in February. And RXR defaulted on a $240 million dollar loan at 61 Broadway in May.
Higher debt costs, in addition to increasing office availability, could mean some office landlords may not be able to fund standard operations, including making promised tenant improvements and maintaining properties.
Having a trusted and best-in-class advisor is increasingly important given recent market volatility and the high financial stakes for tenants in a leasing transaction. Armano Real Estate is making it standard practice to provide tenants with detailed building information including CMBS (commercial mortgage-backed security) information as part of our office building diligence process. We are an unconflicted provider of corporate real estate services maintaining no agency relationships with landlords. Thus, our only incentive is to provide our clients with the best possible options and solutions.
Please see the below link which provides an example of the current office space situation in Manhattan: https://nypost.com/2023/06/08/tower-at-111-wall-street-epitomizes-crisis-of-nycs-commercial-real-estate-market/
And please see the below resources and feel free to contact us regarding your current real estate situation. We can provide a no-fee lease review and analysis and a preliminary space program to help meet your hybrid work plans and corporate real estate vision.
NYS Carbon Emissions
Returning to the Office