Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive..

[marmar]

Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive the Exodus Has Been
by Wolf Richter • Nov 30, 2020

Then there’s the “single-asset” commercial mortgage-backed security (CMBS) backed only by the mortgage of this tower.
By Wolf Richter for WOLF STREET.


This is now happening in apartment towers in big densely populated cities around the US: Suddenly mind-boggling vacancy rates as a large number of tenants have left in recent months. And this is happening even at the best of them. And holders of the commercial mortgage-backed securities (CMBS) are waking up.

The iconic “New York by Gehry” 76-story tower on 8 Spruce Street in the Financial District of Manhattan, designed by architect Frank Gehry and built in 2011, with 899 apartments, plus an elementary school for 600 kids occupying the first five floors, had an occupancy rate of 98% in 2019. By September 2020, the occupancy rate had plunged to 74% – roughly 234 units of the 899 units were vacant!



The photos of the tower with the wrinkled-appearing stainless-steel exterior are from New York by Gehry’s website, which itself lists only about two dozen apartments for rent, ranging from a studio at $2,160 a month to a three-bedroom on the 71st floor for $11,229 a month. No way that it would list all 234 units. That type of catastrophic info is essentially a secret.

The plunge in the occupancy rate caused the mortgage, which was securitized in 2014 into a single-asset commercial mortgage backed security (CMBS), to be put on the servicer watchlist in November, citing the plunging occupancy rate as one of the reasons, according to a note this morning by Trepp, which tracks CMBS. ............(more)

https://wolfstreet.com/2020/11/30/vacancy-rate-at-iconic-manhattan-tower-with-899-apartments-hits-26-this-example-shows-how-fast-massive-the-exodus-has-been/

[CrispyQ]

1. What an atrociously ugly building.

A friend is searching for a house in the Hudson Valley & she says it's almost impossible. She's been outbid three times when she came in at asking price. One time she upped her bid & got outbid anyway.

[Wellstone ruled]

2. Might be a bit Ugly,

but,it is location location. Sad to say,there are hundreds of these situations around the Nation. And the Lenders really do not want to take these properties cause they are not prepared to be in the Rental Business. Most of the underlying Mortgage Debt is spread around in various REIT's on these types of Properties.

[Warpy]

3. Not my taste, either, but the rooms are decently sized

and the rent isn't that bad for Manhattan. I suspect vacancy rates are being driven by WFH, people trading convenience for space since working full time in a studio apartment is far from ideal, they can get enough square footage in an outer borough to be able to close a door on where they work. Or some might be out of work as their businesses catering to the financial district have closed and have decamped to bunk in with friends and relatives.

Whether it fills up again post Covid is anyone's guess. A lot of those businesses are just not going to come back.

[Wellstone ruled]

4. So true on the business

not returning to the normal. But,the dollar value will reset to a more Marketable number and there has and is always a segment of Persons who love the Down Town experience.