It's an empty ghost-town - save for one new Bed, Bath, and Beyond which is doomed from the start. It's in trouble because it's essentially a stone's throw from a now vacant Linen's-N-Things.
So there're all these pretty buildings just sitting there, no doubt with 2006-type debt loads.
CRE is not my gig. Nonetheless I think I can read the listing for the office property a bit.
$30 per square foot, per year times 30,000....
That's $900,000 in total yearly rent....divided by 12 gives:
$75,000 in monthly rent. I wonder how high that is for such space in this area?
Note Midtown Manhattan has dropped from $150 per square foot two years ago to $40-$50 per square foot - at least on a sublet basis. If Manhattan has dropped to that level, I just don't see how this place will command $30 a foot. But, again, I know very little about this business except that the banks who fronted the money are in for a world of hurt.
If we assume that $900,000 is needed to pay the annual debt service on the office building above....we next assume the interest rate at which some Moronic bank gave away the money - which we can use to extrapolate the total loan amount.
Cut that number at least in half and we can figure the dollar loss for the bank. I'm sure it's $7-$9 million alone on this one building - and counting!
Now about the probable loss on the retail space (first pic) which is 8 times as big....whoops!
There's a perception out there that commercial real estate up here in the Northeast is nowhere near as bad as in places like Florida, Arizona, and Michigan.
But I bet that's not entirely true. There's essentially no economy here except the oxymoronical Government Economy. In Massachusetts, if you can't convince a medical professional (or Dunkin Donuts) to lease your space you're pretty much screwed. And this area is slowly losing population.
You gotta love the pictures on The Launch's website:
Imaginary people shopping at imaginary leased stores!
Meanwhile, the banks imagine their loans are worth 100 cents on the dollar....
