Content area
Full Text
The workhorse of Manhattan real estate is becoming an odds-on favorite.
Class B office buildings, or properties that are considered second-tier because of their older infrastructure, are starting to overtake more prime lodgings as the first choice for tenants who prefer a healthier bottom line to a fancy address.
Companies that range from blue-chip investment firms to new media start-ups are flocking to B buildings, lured by lower costs, old-fashioned details and locations in hot neighborhoods.
As the interest builds on the part of tenants, investment groups and bank lenders are paying closer attention.
Infusion of money into system
"Money has come back into the lending system fiercely (for B buildings)," says William H. Stern, managing director at Sonnenblick-Goldman Co.
With Class A buildings being quickly snatched up by wealthy REITs, other investors are turning to the B properties that make up a large majority of the city's office space.
Once taken for granted, second-tier buildings have plenty of admirers these days. A dearth of space in midtown, as well as the renewed focus...