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Lendlease feels the effects of US property downturn

If you were looking for an illustration of how the commercial property turmoil in the US is being felt in Australia- then look no further than Lendlease.

Kate Burgess
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Hayes Point (formerly Van Ness) artists' impression. Supplied.

If you were looking for an illustration of how the ripple effects of the commercial property turmoil in the US are being felt in Australia- then look no further than Lendlease.

The storied property developer today said it will not restart work on its iconic $1.15 billion Hayes Point development in San Francisco until it can attract an anchor tenant or new investor. Those might prove difficult to come by in a tough environment for commercial property, with declining vacancy rates stemming from the work from home revolution leading to sharp declines in office tower values.

Tony Lombardo, Lendlease's CEO, told analysts at the company's full-year results briefing today that its largest project in the Americas would remain in limbo until it gets more financial certainty. Workers downed tools in March due to permitting issues with the local authority.

“We would love to be able to secure a tenant for the office component of the project or a capital partner. Until we get one of those two things we won’t restart. We feel confident from a capital perspective that there won’t need to be an impairment.”