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business8h ago
Manhattan office tower values plummet below COVID-era slump amid fears AI will wreak a white-collar bloodbath
- Manhattan office landlords are trading at implied values below their June 2020 levels, signaling renewed caution.
- AI-related disruption is cited by Evercore as a legitimate risk to long-term office demand.
- Some Manhattan towers remain valued below pandemic-era numbers as concerns about AI press the market.
- The market notes a broader office recovery but warns fundamentals remain weak for some properties.
- The New York Times Building had its appraised value cut by about 40%, signaling sector uncertainty.
- February leasing slowed and availability rose for the first time in two years, reflecting market strain.
- Aging Manhattan towers are being repurposed into housing amid remote-work trends.
- 25 Water Street is cited as the largest office-to-residential conversion in the U.S., illustrating the trend.
- Analysts expect AI concerns to influence investor sentiment even as subway ridership recovers.
- Evercore ISI's Steve Sakwa comments on a potential prolonged impairment in cash flows for high-quality assets.
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