Survey: NYC Property Values Reach Peak

New York City commercial property values have hit the ceiling, a sizeable majority of real estate executives said in a new survey by accounting firm Marks Paneth LLP.

More than 70 percent of property professionals in the city said values reached their peak, compared to 54 percent who said the same thing in July.

Marks Paneth surveyed more than 100 New York commercial property executives. It found that 35 percent of executives think New York property values will start to decline and 36 percent believe they will hold steady. Only 21 percent predicted that values will continue to rise.

“While executives see New York real estate values topping out in a pretty definitive way, they’re hardly concerned that today’s international crises will slam the market,” said Marks Paneth Partner in Charge of Real Estate William Jennings.

Jennings reported that he found “a touch of concern” about China. More than half the executives surveyed–55 percent–said recent volatility in China will negatively affect New York’s commercial property market.

Only 11 percent of those surveyed by Marks Paneth said troubles abroad will hurt New York’s property market. Forty percent say they benefit property values here because money will flow out of distressed foreign economies to New York real estate as a safe haven. Nearly 40 percent said global crises represent a double-edged sword because they can both boost and drag down values.

The New York Times reported last week that China’s recent currency devaluation and stock market crash made many Chinese individuals and companies more eager to invest in the U.S., not less.

Though most New York real estate professionals believe commercial values have peaked for the current cycle, they remain divided about what effect a Federal Reserve interest rate hike could have. Nearly half said a hike will put more downward pressure on values while 35 percent said values will not drop.