In a stunning indicator of the current commercial real estate climate, a prominent Midtown Manhattan office tower located at 135 West 50th Street has been auctioned off for a mere fraction of its previous value. The building, a substantial half-block glass structure, which notably houses the Urban Hawker Singapore-style market on its ground floor, was sold at auction for just $8.5 million on Wednesday. This price represents a staggering 97% discount from the $332 million its previous owners paid for the property in 2006, as reported by the New York Times.
Real estate professionals, including developers and sales brokers familiar with the impacts of remote work on office building valuations, have expressed disbelief at the magnitude of this discount. Many cite this sale as an unprecedented event, struggling to recall a comparable instance of such a drastic value depreciation in recent history.
Exterior view of 135 West 50th Street, a glass office building in Midtown Manhattan, highlighting its modern facade and urban setting.
This dramatic markdown in the sale price of 135 West 50th Street is widely interpreted as a stark reflection of the challenges currently facing the office market. UBS, the previous owner, decided to auction the 23-story building after unsuccessful attempts to sell it through conventional methods. The auction was conducted on Ten-X, a real estate auction website. The 1963-era building, despite undergoing visible renovations aimed at attracting tenants in a post-COVID environment, ultimately garnered only a single bid at the significantly reduced price.
Side view of 135 West 50th Street showcasing its height and position within the Midtown Manhattan cityscape.
It is crucial to note that the sale of 135 West 50th Street did not include the land beneath the building. The land ownership was separated in 2019 when the seller sold it to Safehold for $285 million, as reported by The Real Deal. This prior land sale complicates the financial analysis of the recent building auction, suggesting that the apparent loss might be partially offset by the earlier land transaction profits. However, despite this context, the discounted building sale is undeniably a substantial financial hit.
The base of 135 West 50th Street, showing the entrance and street-level activity in Midtown Manhattan.
David Sturner, son of the developer who sold the property in 2006, expressed his astonishment to the Times, stating, “What’s shocking is how fast the valuations dropped now that we’ve seemingly reached bottom, or close to it.” He acknowledged that while 135 West 50th Street wasn’t their prime asset, it was considered a “solid” property at the time of its previous sale.
Historically, 135 West 50th Street has been home to notable companies such as Zales, the New York Telephone Company (now Verizon), and Sports Illustrated. However, currently, the building faces a 65% vacancy rate. Despite its advantageous location across from Radio City Music Hall on Sixth Avenue, factors such as its mid-block location, lower ceiling heights, and tenant distribution have made it less attractive for residential conversion, further complicating its marketability.
Close-up of 135 West 50th Street, emphasizing architectural details and window lines of the office building in Midtown.
Steven Jacobs, president of the auction website Ten-X, indicated in a prior interview with The Real Deal that UBS was motivated to expedite the sale, accepting a significant loss to move forward. “UBS’s perspective was, ‘We need to sell this quick, we’ve kind of made peace with this is gonna be a big loss,” Jacobs stated. The sale of 135 West 50th Street at such a distressed price underscores the profound challenges and rapid devaluation occurring within the Midtown Manhattan office market and serves as a critical case study for the broader commercial real estate industry.
