AIG to Put Manhattan Headquarters Up For Sale
- Mar 18, 2009
Embattled insurer American International Group Inc., which has made headlines this week due to shelling out millions in executive bonuses after receiving a $173 billion bailout from taxpayers, said today that it is putting its Downtown Manhattan headquarters building up for sale, along with another nearby office owned by the firm. The story was first reported by the New York Post. According to multiple reports, AIG spokesman Mark Herr said that the company is “evaluating the sale” of both its 66-story, 775,000-square-foot headquarters building at 70 Pine St., as well as 72 Wall St., a 16-story building measuring 279,000 square feet. The move comes in the midst of a flurry of criticism directed toward AIG for giving out $165 million in employee bonuses over the weekend, drawing the wrath of government officials and the public alike. On Monday, President Obama said he would try to halt the bonus payments using the leverage provided by the government’s current 80 percent ownership stake in AIG. Unfortunately for AIG, the current state of the commercial property market will make it nearly impossible for the firm to get anywhere near the sale price that it would have just a couple of years ago. The credit crunch has greatly limited investors’ ability to shell out the vast sums they were paying in the past for assets, even in the New York market.Earlier this month, CB Richard Ellis Investors acquired a 905,000-square-foot interest in Manhattan’s 1540 Broadway. The firm paid a reported $355 million for the property, which had been owned by Macklowe Properties before being turned over to Deutsche Bank after Macklowe ran into trouble repaying debt. The $355 million figure made the deal the largest in New York City so far this year, illustrating just how far prices have fallen from 2006, when the same asset sold for $525 million to Equity Office Properties Trust. Equity Office later sold it to Macklowe in a $7 billion portfolio deal. Also in early March, the New York Times Co. reached a $225 million sale-leaseback agreement with W.P. Carey & Co. for the 750,000 square feet of office space that the Times owns at its 1.5 million-square-foot Midtown headquarters. While a nice chunk of change for the firm–which has seen financial troubles of its own–the sum is much smaller than the Times likely could have received when the economy was healthier.