An Office Tower Sold for $8.5 Million. It Was Once Worth 40 Times That.

In 2006, the hulking office building at 135 West 50th Street in Midtown Manhattan sold for $332 million. Tenants occupied nearly every floor; offices were in demand; real estate was booming.

On Wednesday, it changed hands again, in an unusual online auction — for $8.5 million.

The staggeringly low sale price of the 23-story glass behemoth that was once the headquarters of Sports Illustrated is the latest and perhaps most surprising sign of how the pandemic has upended the state of office buildings in New York City, home to the largest central business district in the United States.

Several large Manhattan office buildings have sold in recent years at steep discounts, some going for less than half of what the previous owners paid, in a market that has yet to hit rock bottom.

But office developers and sales brokers in New York City said they could not recall another large Manhattan building like 135 West 50th that had been sold for so little.

David Sturner, a developer whose father’s firm owned the building before selling it in 2006, was stunned by the final price.

The building, he said, “certainly wasn’t the greatest asset we owned” but was a “solid” property. “What’s shocking is how fast the valuations dropped now that we’ve seemingly reached bottom, or close to it,” he added.