Mega REITs Remain Confident in NYC Office, Class A Malls

NEW YORK CITY-Value-add opportunities, new leasing strategies and ditching non-core assets were the common themes discussed by the nation’s biggest real estate investment trusts at NAREIT’s annual investor forum REIT Week 2012 in Midtown Manhattan today. During the first half of the conference, the majority of speakers expressed confidence in the US commercial real estate market, particularly, office and retail properties located in core gateway cities with steady job growth and increasing consumer confidence. 

On the office front, SL Green Realty Corp., New York City’s largest office landlord, said it is “entering back” into Midtown South after selling off a bulk of its assets in the Manhattan submarket in 2006 and 2007. Marking its first official return to the area, the REIT recently purchased 304 Park Avenue South for $135 million, and Andrew Mathias, president of SL Green, said the company is planning more acquisitions in the Flatiron District and Gramercy Park. “We are actively looking for other opportunities,” he said, noting that while it is a “constrained area,” companies are flocking to the neighborhood not due to price, but as a ‘lifestyle’ choice. “There is a very broad base of tenants looking for that Downtown/Midtown South-type lifestyle,” he added, explaining that the REIT has been watching the market closely, and has previously found success with its acquisition of One Madison Avenue across the street from the highly-trafficked Madison Square Park.