The COVID-19 outbreak nearly froze the office-property sales market for much of the second and third quarters. Buyers weren’t sure what the future held for office buildings due to the uncertainty of so many people working from home amid the pandemic. Meanwhile, sellers didn’t want to unload office properties at fire-sale prices.
However, the office property market has started to thaw during the fourth quarter. One catalyst was that several notable deals featured e-commerce giant Amazon (NASDAQ: AMZN) as a key tenant.
Thawing out in a big way
In early November, Manhattan’s largest office landlord, SL Green Realty (NYSE: SLG), signed a contract to sell 410 Tenth Avenue for $952.5 million. That price tag for the 636,000 square foot Manhattan office redevelopment represented the largest commercial property sale since the onset of the pandemic in March. SL Green expects to complete the redevelopment project, which will transform the 20-story building into a Class-A property, by the third quarter of next year. Amazon and First Republic Bank are the two anchor tenants for the project.
In commenting on the deal, the office real estate investment trust (REIT) stated: