As all the major banks rush to take losses and cleanse their books for next quarter, a UBS real estate deal in Manhattan is rankling Big Apple landlords.
The Swiss banking giant is planning to spend about $40 million to buy out the last seven years of a major lease—about 3 full floors—in the monolithic CBS building in Midtown.
Other big New York commercial property players are twisted because UBS could have sublet the space itself—and cut its loss—but instead chose to take the hit. Well, really, what’s $40 million when you’re wrote off $1.8 billion the week before?
While it’s not a big deal to the banks, it makes it harder for local landlords to do deals for similar swanky office space at any kind of competitive price. The reason: CBS, the landlord in that building, can plow millions from UBS into improving the space and not have to squeeze any prospects for a more expensive lease.
The deal isn’t done yet, some Manhattan property players told us, but wind of it is starting to swirl around the community.
A bank spokeswoman said UBS “has several space parcels on the sublet market in Midtown Manhattan and we are evaluating various alternatives with potential tenants and our respective landlords.”