The U.S. commercial property market is on the upswing after a predicted collapse that never quite happened. According to Bloomberg News, commercial properties sold by institutional investors last year rose in price by 19 percent, which, according to the MIT Center for Real Estate, is the second-largest price gain ever for those types of sales. Meanwhile, Real Capital Analytics recorded investments in office properties last year at $41.6 billion, more than double what was invested in that sector in 2009, and the commercial mortgage-backed securities market is also beginning to rebound. Comments

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The sales volume of U.S. commercial properties in the first two quarters totaled just over one quarter of the average of the six years prior, according to preliminary figures from Real Capital Analytics. Through the end of June, $34.2 billion worth of deals had been completed, compared to the peak of $277.7 billion worth of commercial property sales during the same period in 2007, the data show. As Bloomberg News reported, the dismal figures are a reflection of owners keeping their properties off the market until values recover. That’s frustrating for private equity investors like Blackstone Real Estate Advisors and Goldman Sachs, who have record amounts of capital available for U.S. property deals and are chomping at the bit to get into the game. Still, the first two quarters’ numbers represent an improvement from the first half of 2009, in which commercial property sales volume was 58 percent lower. [Bloomberg]

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The former Toy Building at 1107 Broadway and developer Yitzchak Tessler (building photo source: PropertyShark)

Developer Yitzchak Tessler is facing multiple challenges in his effort
to hold on to the condominium conversion project at the former Toy
Building at 1107 Broadway overlooking Madison Square Park. The
bankrupt lender Lehman Brothers Holdings sued Tessler and his company
1107 Broadway LLC yesterday to foreclose on a $136.8 million senior
loan. [more]

Before Robert White founded Real Capital Analytics in 2001, “nobody knew how many office buildings were traded in any given year or how big the volume was in this marketplace,” he told the New York Times. White’s New York-based real estate research firm now tracks commercial real estate deals in 108 countries, applying the metrics from Wall Street to publish quarterly reports for clients, and those metrics haven’t been kind to New York City recently. There is good news, though. “I’m watching very closely the pricing of
office buildings in London, because that city is a very good template
for where Manhattan is headed next,” White said. Last year was a miserable one for New York investment sales, he said, with below $7 billion in deals for all property types in the metropolitan area, down from $77 billion in 2007 and $26 billion in 2008. “When you think of it, $7 billion in deals is nothing — it’s not much more than the price of Stuyvesant Town,” he noted. That dearth in sales means Manhattan no longer sits on its “perennial perch as the No. 1 market. It’s not even in the top 10 of all property types — it’s down to No. 13,” White said.  [NYT]