The office availability rate Manhattan jumped to 17.2 percent in the first quarter, largely driven by sublease space, according to Savills.
The few merchants looking to sign new leases on one of the world’s most fashionable retail streets are demanding deep discounts.
With a recovery coming sooner than many anticipated, there may be more capital chasing distressed assets than viable opportunities.
Current market conditions create a rare opportunity for deployment of preferred equity as a form of short-term recapitalization of commercial real estate assets.
The massive wave of defaults expected last year has so for failed to materialize. Now the window of opportunity for discount deals might be closing.
So far, lenders have been open to loan workouts, but that won’t last forever, market sources warn.
Already this month 15 firms with at least $50 million of liabilities have filed for bankruptcy protection.
The mall REIT approached investors to explore interest in providing bankruptcy financing.