It is quite difficult to discern the worst sufferers in the realm of US real estate market on account of downturn but there is no doubt that skyscraper are in that list. What made them sufferers of this crisis? According to the an assortment of studies, loan defaults in the worst commercial real estate market in decades have led to the creation of tens of billions worth of distressed properties all over the United States and the same situation is leading to the emergence of economical auctions of landmark skyscrapers. As stated by analysts, even celebrated developers are falling behind on mortgages as tenants leave and can find no financing to cover payments.
“Just imagine in a residential market, if there weren’t 80 per cent loans available for everyone. If everyone had to buy their houses in cash, the values of houses would plummet everywhere,” said Dan Fasulo, a managing director at Real Capital Analytics. “That’s happening on a massive scale on the commercial side.”
The Hancock Tower and the Sixth Avenue building are the first of a wave of foreclosures and auctions expected in the next year that will slash sale values of formerly prime real estate, analysts say. “This is a train wreck that’s coming in the large office towers,” said Matthew Haines, chairman of the Propertyshark.com real estate website.
Don’t get amazed at this since there are lots still. Take for instance Real Capital Analytics, which is known for tracking commercial real estate transactions. The company viewed more than $86 billion worth of distressed properties in the country as of April, over $6 billion in Manhattan.
Even in New York, known as a major financial and cultural center, vulnerable skyscrapers can be found easily. They include a 23-storey Moinian Group skyscraper across from the New York Public Library that sold for $160 million two years ago, and also an office building a few blocks away on Fifth Avenue that Moinian and Goldman Sachs’ Whitehall group bought two years ago.
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