23-Floor Manhattan Office Building Just Sold at a 97.5% Discount

The 23-floor office building at 135 West 50th Street in Midtown Manhattan has been sold for $8.5 million, a staggering 97.5% discount from its 2006 sale price of $332 million. The building, which is currently only 35% occupied, reflects the significant impact of the pandemic on New York City's office market. The sale occurred through an online auction, where the property was initially listed with a starting bid of $7.5 million. The previous owner, UBS Realty Investors, had attempted to sell the building for under $50 million before resorting to the auction. The new owner faces challenges, as the building's rental income does not cover the lease payments for the land, which is owned separately. The building's occupancy has decreased from 40% a year ago, and it is considered one of the least occupied large office buildings in Manhattan. Experts suggest that the new owner may need to invest significantly in renovations or consider converting the building into residential units, although such transformations are complicated and costly. The building, constructed in the 1960s, has seen a decline in appeal due to its outdated interiors and location, which is not ideal for modern office tenants. The sale highlights the ongoing struggles of the Manhattan office market, which has been affected by shifts towards remote work and an oversupply of office space.