By: Ilana Siyance

Commercial space on Wall Street is still suffering, with heavy vacancies and a major foreclosure looming.

The building at 111 Wall Street demonstrates how bad things have gotten.  The 1.2 million square-foot tower at the corner of South Street “epitomized the crisis” of the downtown commercial market, the NY Post reported.  Owned by Nightingale Properties and Intervest Capital Partners, the 24-story building is now facing foreclosure action.  Last week, lender Oaktree Capital Managementinitiated foreclosure, as first reported by Real Estate Alert.  An auction, to be managed by JLL, the tower’s leasing agent, is scheduled for Sept. 19. JLL declined to comment.

The 1960s-vintage tower is not the only one on the block suffering.  In fact, it sits on the biggest mostly-empty commercial block in the Big Apple. The block stands at the less-convenient eastern end of Wall Street, not as centrally located as many would like. The building itself was often widely considered an ugly duck, and now has a whopping 1.04 million square feet of available space.  Worst of all, the building recently underwent an extensive $100 million renovation, in hopes of turning its luck around.  Not only did the renovations not achieve their goal, but the redevelopment project isn’t even finished. Per the Post, some of the new curtain-wall glass is incomplete, and the interiors are not all finished either. This will probably mean that if a foreclosure auction really does take place, the added cost to finish the renovations will likely be reduced from the potential sales price for the tower.

Even in the better areas of Wall Street, commercial real estate has a long road to recovery.  The 55-story skyscraper at 60 Wall Street, a few blocks to the east, is nearly vacant.  The building, which is nearly twice as large as 111 Wall, was originally built in the late 1980’s to be occupied entirely by J.P. Morgan & Co. The building at60 Wall Street, currently owned by GIC Singapore and Paramount Group, has a much more central location in Wall Street, being situated closer to the Fulton Center subway complex.  Per the Post, Paramount is said to be in talks with a number of potential tenants, having tapped leasing agent CBRE. The iconic building’s success in leasing out its commercial space will have a strong bearing on the entire Downtown area.

With so much vacant commercial space in Wall Street, Gov. Kathy Hochul and NYC politicians took the initiative to resolve to turn Five World Trade Center into much-needed housing. Also referred to as 130 Liberty Street, the building was originally planned as an office building.  Developers Brookfield Properties, Silverstein Properties, OmniNew York and Dabar Development Partners wanted to make a 900-foot-tall $1 billion residential tower.

Just last week, lawmakers finally agreed on a plan to allow the residential apartment building to offer 1200 units, the Post reported.  As part of the deal, one third of the apartments have been earmarked for low-and moderate-income New Yorkers as well as some set aside for 9/11 survivors and first responders.  Thus, the approved plans for the 80-floor eye-catching skyscraper are to include 400 permanently affordable housing units.  The resolution, ending a two-year battle, included $65 million in state subsidies.