The tower at 111 Wall St. epitomizes the crisis that faces the Manhattan commercial real-estate market — and the city itself.
The 1960s-vintage tower emerged from its ugly-duckling original appearance as a born-again downtown gem after a top-to-bottom redesign.
But the timing couldn’t be worse for its owners, who invested close to a half-billion dollars and face a collapse in demand for office space.
Nightingale Group and Wafra Capital Partners bought a $175 million long-term leasehold on the 25-story, 1.2 million-square-foot tower in 2019 when Citigroup moved out.
It seemed like a sound, diamond-in-the-rough investment when financial and media companies were looking for lower-priced but viable alternatives to spectacular, brand-new towers — and nobody had yet heard of the coronavirus or work-from-home.
The owners boldly embarked on a $100 million modernization and architecturally distinguished “repositioning” that included an all-new, bronze-trimmed curtain-glass facade and spent $220 million more for the land underneath the tower in 2021.
But the newly gleaming profile, East River views, impressive tenants’ amenities and state-of-the-art electronics and mechanical systems might not be enough to lure tenants to 111 Wall when downtown is limping under the city’s highest office vacancy rate of 21%.
The building moreover must compete with nearby properties, such as 60 Wall St., that are also empty or near-empty.
“I don’t know of any company that’s moving to the area between Water Street and the river,” one broker said.
“I wish them well.”
The story of 111 Wall St. repeats across the city.
Whether they are long-term owners or new investors, they’re holding onto buildings and sweating out the big question — does anyone want to move in?