|AIG's headquarters in Manhattan, in the Wall Street district. The real estate market in Manhattan has been soft. (Mark Lennihan/Associated Press)|
AIG puts headquarters in Manhattan up for sale
NEW YORK - AIG said yesterday it's putting its downtown Manhattan headquarters and a nearby office building on the block.
Mark Herr, spokesman for American International Group, said the company is evaluating the sale of 70 Pine St. and 72 Wall St. as part of its efforts to boost operations.
The potential sale, first reported by The New York Post, comes at a difficult time for the insurance conglomerate and in the New York real estate market. Prices for office buildings are falling in the wake of tight credit and downsizing in the financial industry.
The average sales price for downtown offices that aren't top quality was $312 a square foot at the end of last year, according to commercial real estate services firm Cushman & Wakefield Inc. That means the 775,000-square-foot AIG headquarters, built in 1932, would go for about $242 million at best.
But it's hard to value a building in a market where few deals are getting done. On top of that, AIG could leave the building and finding a new tenant would be difficult in a recession, said Dan Fasulo, managing director at research firm Real Capital Analytics.
"I dare not even venture a guess on a price because this is exactly the type of asset lenders are avoiding like the plague right now," Fasulo said.
The best option for a new owner is to redevelop the property into a hotel or residences, Fasulo said, which is also risky in the current climate.
AIG also owns 175 Water St. in downtown Manhattan, according to Fasulo.