Huge Midtown office building is being auctioned for a 97% discount after receiving just 1 bid

In a sign of the times, a nearly 1 million square foot office building in Midtown has sold at a steep discount.

A large half-block glass tower at 135 W. 50th St. – the home of Singapore’s 2022 Urban Hawker-style open-air market – sold at auction for just $8.5 million on Wednesday. That’s a staggering drop from the $332 million its sellers bought it for in 2006, the New York Times reported.

Even work-weary remote developers and sales agents aware of how badly working from home has affected building values ​​say such a discount is unheard of — and one like it couldn’t be thought of in recent memory.

After failed attempts to unload the classic behemoth built in 1963 — which, since COVID, has received a significant facelift to lure tenants — the structure’s owner, UBS, put it up for auction in a two-day auction real estate website called Ten-X. On Wednesday, it closed after receiving a single offer.

“What’s shocking is how quickly valuations have fallen now that we’ve seemingly hit rock bottom, or close to it,” David Sturner, the son of the developer who sold the property in 2006, told the Times of Sales.

The building was “certainly not the greatest asset we owned,” but it was a “solid” property, he added, though today its woes abound.

Once home to companies such as jewelry retailer Zales, the New York Telephone Company (predecessor to Verizon) and Sports Illustrated, the 23-story behemoth today sits 65% vacant, despite a prime location across Sixth Avenue from Radio City. Also, the bad light from its mid-block address, relatively low ceilings, and randomly placed tenants make it a particularly bad contender for condo conversion.

And, most importantly, the building does not come with the land beneath it. It was sold by the seller to a company called Safehold for $285 million in 2019, the Real Deal reported, arguing that profits on the sale of the land mean the discounted sale of the building should be considered much less of a loss.

But it sure was still a loss.

“UBS’s perspective was, ‘We have to sell it quickly, we’ve made peace with this is going to be a big loss,'” the auction website’s president, Steven Jacobs, said last month in an interview, according to Real Deal. . “We have to sell it and we have to move forward.”