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myassholealt t1_iutbyrr wrote

Dude smells a recession on the horizon and doesn't want to get bogged down on new developments is my uneducated guess.

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Burymeincalamine t1_iutdfnu wrote

It doesn’t take a billionaire multiple rate increases to “smell a recession”, and real estate developers who are flush with cash do not pause bottoms up new builds that take many, many years for cyclical events. Either they have run out of cash flow or this is election-driven

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well-that-was-fast t1_iuxsapj wrote

>>>But Evercore ISI analyst Steve Sakwa told Crain’s that Roth’s statement means the project is “certainly delayed” due to lack of office demand. “They won’t spend billions to build an empty building,” he said.

Presumably this means they don't think Class A occupancy will be back to normal for 3+ years.

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Burymeincalamine t1_iuxtvkl wrote

Maybe. Or every big firm has recently signed a long lease over at Hudson yards or another new shiny building (one Vanderbilt, etc) recently — all of which are like 100% lessed — and maybe they haven’t seen much interest in their upcoming penn hotel replacement

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well-that-was-fast t1_iuxv2lb wrote

It's hard for me to imagine Hudson Yards being full while buildings above Penn are unrentable. I know what I'd find more convenient. But I'm not a billion dollar developer.

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D14DFF0B t1_iuto0q2 wrote

This is a multi-year plan. A year-long recession isn't material, and may be helpful.

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Johnnadawearsglasses t1_iuw6u2c wrote

Not when you need to fund it during a recession and a period of multi year high interest rates. To the extent the rest of their portfolio suffers, will create credit and liquidity risk.

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Rottimer t1_iuwpwwh wrote

I doubt it’s about a recession and more about will they be able to get a return on that investment given how many people work from home.

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Burymeincalamine t1_iux73ry wrote

The types of tenants that occupy these buildings (banks, law firms, consulting firms, tech) are back in the office for front office teams - banks 5 days a week, and the others 3+ days a week. Just because average companies have gone remote doesn’t mean that anchor trophy tenants have also.

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cbnyc0 t1_iuxsfa5 wrote

Not a whole lot of new offices opening in midtown right now.

He knows he doesn’t have enough customers to demand developing more towers.

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pixel_of_moral_decay t1_iv32kgv wrote

It also buys time for more tax breaks.

He’s not going to be able to lease the space, which means money is tied up in that project and high interest rates.

Much better to leave money in the bank, spend the time insisting he needs tax breaks to help “create jobs” then try to time construction with the emergence out of a recession.

He’ll get $100M+ out of this move.

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