New York Sets Dollar Volume, Price Records

New York City set another record last year with aggregate sales totaling $74.5 billion, exceeding 2007’s $62 billion prior peak, reported Cushman & Wakefield, New York.

Several mega-deals led to the unprecedented dollar volume, including Blackstone’s $5.4 billion Stuyvesant Town purchase and a $3.8 billion investment into Brookfield Development’s project near Hudson Yards on Manhattan’s west side. C&W said four of the city’s top six quarterly dollar volume totals occurred in 2015 from these large transactions.

In addition, the average price per property hit a record $14.7 million in 2015, exceeding 2011’s previous high by 17.6 percent.

“2014 and 2015 were probably the two best years ever for [New York’s] sales brokerage industry,” said C&W Chairman of New York Investment Sales Bob Knakal. “Supply was strong, demand was excessive and market indicators were moving in the right direction.”

Knakal said prices per square foot for core product types reached a new high last year as well, climbing 8.2 percent over 2014’s previous record to $498 per foot.

Despite strong dollar volume and pricing, New York transactional activity fell 8.6 percent from the previous year to just over 5,000 properties sold, but it remained above 2007’s former record, Knakal said.

In another survey, most New York City property executives said they expect some turbulence for Times Square commercial real estate. Accounting firm Marks Paneth said two-thirds of executives it surveyed said bringing new tenants will present a challenge as some big existing tenants move out.

“The real estate community seems to believe that as more Times Square commercial real estate becomes available, tenants will be reluctant to move there, largely because of the perception that the neighborhood is chaotic and overrun with tourists,” said Marks Paneth Partner-in-Charge William Jennings.

Elsewhere on the West Side, the giant Hudson Yards project drew mixed reviews. Nearly half of the CRE executives surveyed reserved judgment on the project’s short-term prospects, while 37 percent predicted that it will succeed. But many executives said Hudson Yards will have the most positive long-term impact on real estate values in its neighborhood–46 percent picked it compared with 25 percent who picked the Second Avenue Subway and 23 percent who named the Long Island Railroad at Grand Central. Only 6 percent chose the World Trade Center site.