AIG selling Manhattan headquarters

NEW YORK (AP) — AIG said Wednesday it’s putting its downtown Manhattan headquarters and a nearby office building on the sales block.

Mark Herr, spokesman for American International Group Inc., said the company is evaluating the sale of 70 Pine Street and 72 Wall Street as part of its efforts to boost operations.

The potential sale, first reported by The New York Post, comes at a difficult time for the insurance conglomerate and in the New York real estate market. Prices for office buildings are falling in the wake of tight credit and downsizing in the financial industry.

The average sales price for downtown offices that aren’t top quality was $312 a square foot at the end of last year, according to commercial real estate services firm Cushman & Wakefield Inc. That means the 775,000-square-foot AIG headquarters, built in 1932, would go for about $242 million at best.

But it’s hard to value a building in a market where few deals are getting done. On top of that, AIG could leave the building and finding a new tenant would be difficult in a recession, said Dan Fasulo, managing director at research firm Real Capital Analytics.

“I dare not even venture a guess on a price because this is exactly the type of asset lenders are avoiding like the plague right now,” Fasulo said.

The best option for a new owner is to redevelop the property into a hotel or residences, Fasulo said, which is also risky in the current climate.

AIG also owns 175 Water Street in downtown Manhattan, according to Fasulo.

The news comes as AIG faces outraged lawmakers after the company doled out $165 million in employee bonuses over the weekend. The company has received $170 billion in government bailout money.

Edward Liddy, AIG’s chairman and chief executive, acknowledged Wednesday that the company’s multimillion-dollar bonuses were “distasteful” to many and had provoked a firestorm of wrath.

Lawmakers from both parties expressed fury over the company’s behavior. For the American public, AIG now stands for “arrogance, incompetence and greed,” said Rep. Paul Hodes, D-N.H.

Associated Press Writer Jim Kuhnhenn contributed to this report.