12 april 2022
A legendary Manhattan skyscraper is criticized for not working elevators. This also causes red jaws for the Belgian co-owner AG Real Estate.
It is not often that a Belgian real estate project makes the front page of The New York Times. AG Real Estate, the real estate subsidiary of insurance company AG Insurance, recently succeeded with 20 Exchange Place, an Art Deco skyscraper in New York’s Manhattan borough.
The building, just off Wall Street, opened in 1931 as the City Bank-Farmers Trust Building. With a height of more than 200 meters, the tower is still one of the tallest buildings in Manhattan. At the foot of the building are 14 gigantic statues, representing the ‘Giants of Finance’.
But the residents of the more than 750 apartments feel trapped in the building. Entitled “High-Rise Hell,” The New York Times reported in late March that the elevators in the 59-story tower had been malfunctioning or not working since November. Due to the unpredictable elevators, residents missed appointments, arrived late or did not get out of their homes. The case sparked an uproar in the city, with local politicians and residents organizing press conferences in protest.
According to DTH Capital, which owns 75 percent of the tower, engineers have not yet identified the cause of the problem with the eight elevators. The owner claims to have offered some tenants hotel rooms or apartments on the lower floors (where the separate elevators still work) or in neighboring buildings.
DTH Capital is also lenient with rents, which run as high as $5,000 a month for a one-bedroom apartment, and recruited couriers to deliver parcels to the upper floors. “It’s really bad luck,” sighs Serge Fautré, the CEO of AG Real Estate. “But it’ll be all right.”
It’s really bad luck. But it will be all right.
AG Real Estate, through DTH Capital, also co-owns 70 Pine, another tower near Wall Street. But the American adventures have been worrying the Belgian real estate company for some time. The Belgian company Westinvest, which includes the interest in DTH Capital, suffered a net loss of 14.6 million euros in the corona year 2020. In the same year, a write-down of 12.5 million euros was booked.
Fautré minimizes the importance of those figures because only the consolidated results count. Although he acknowledges that the New York tower projects made a loss in the corona period. ‘In 2020, the results fell because the occupancy was much lower. The New York market is highly volatile. 2021 was also difficult. But New York is alive again. Today, almost all flats have been re-let. And the value of the leases that we are now concluding is 10 percent higher than in 2019.’