Manhattan mixed-use property values fall by half, Massey report shows
July 29, 2009 12:00PM By Adam Pincus
Massey Knakal's Robert Knakal (Source: NYO)
A buyer could get twice as much mixed-use space in Manhattan in the first half of 2009 than in the same period a year earlier, according to a new citywide mid-year report from commercial sales firm Massey Knakal Realty Services.
The prices for mixed-use properties fell 53 percent to $535 per square foot from $1,135 per square foot in the first half of 2008, the firm's data show.
The dramatic reduction highlights the changes in the market from a year earlier as credit tightened and the economy weakened.
Sales in the first six months of the year in Manhattan, in all categories of buildings priced higher than $500,000, were down 82 percent to $1.9 billion, from $11 billion in 2008, and $30.8 billion in 2007, the firm reported. The transaction volume fell 74 percent from the first half of 2008 to 95 sales, totaling 122 buildings.
Company Chairman Robert Knakal said he expected prices would continue to fall even as the numbers of transactions increased.
"Even with a significant increase in volume, we expect prices to continue to drop as fundamentals deteriorate, caused by continuing increases in unemployment," he said in a statement.
In Manhattan, the 15 mixed-use sales in the first half of the year included 81 Baxter Street which sold for $3.57 million and 102 Charles Street with a sales price of $6.5 million, city records show.
In other segments of the Manhattan market, the price of multi-family walk-up apartment sales fell 17 percent to $494 per square foot in 2009 from $599 per square foot in the same period in 2008, and elevator building prices fell to $468 per foot from $532 per square foot last year, the company reported.
In northern Manhattan and the outer boroughs, walk-up prices fell as much as 41 percent. In Northern Manhattan, which last year had the top price per square foot for multi-family walk up buildings, prices dropped 41 percent to $124 per square foot from $211 per foot.
Queens, which now has the most expensive walk-up prices in the outer boroughs, saw prices decline 13 percent, the smallest percentage drop in the city. The sale prices fell to $176 per square foot this year from $204 per square foot in the first half of 2008, the Massey Knakal figures show.
Prices for walk-up apartment buildings in Brooklyn fell 18 percent to $148 per square foot, while in the Bronx they dropped 23 percent to $76 per square foot.
BSR - Manhattan 1H09w
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Comments
Anonymous
Bob Knakal is one of the most versed people in real estate. Big respect for his knowledge and understanding of the market.
Comment #1 Posted By: Anonymous 07/29/09
Anonymous
I enjoyed him very much at The Real Deal forum last year. Seems like he knows his topic very well.
Comment #2 Posted By: Anonymous 07/29/09
Anonymous
Perhaps Bob should sit down with his brokers and explain this market to them. Based on this information, I would estimate that most Massey Knakal listings are asking twice what the buildings are actually worth. Bob and Massey Knakal agents are largely responsible for the collapse in transaction volume. His agents need to value and price properties appropriately (based on facts) and educate their clients accordingly.
Comment #3 Posted By: Anonymous 07/29/09
Anonymous
I heard he was nominated for a nobel prize in economics
Comment #4 Posted By: Anonymous 07/29/09
Anonymous
don't forget, not only is he a brilliant businessman, he is a sober, God fearing family man. I hope he runs for Mayor
Comment #5 Posted By: Anonymous 07/29/09
Anonymous
all of his listings are extremley overvalued
Comment #6 Posted By: Anonymous 07/29/09
Anonymous
he "adds value" to all his listings, just by using his name, just like trump
Comment #7 Posted By: Anonymous 07/29/09
Anonymous
Massey Knakal has harmed itself by taking overpriced listings that sit and sit on the market and give sellers false hope. Massey has been trying to raise cash in a sale of part of the business. They could generate cash by selling properties if they just priced them appropriately.
Comment #8 Posted By: Anonymous 07/29/09
Anonymous
#7 - the only thing trump adds is a neon orange glow coming from that fine head of hair
Comment #9 Posted By: Anonymous 07/29/09
Anonymous
I am not an MK hater because they are a producing firm and Bob is a classy guy. However, they have branded themselves as the whore of the investment sales industry and it has its negative effects on the marketplace. They will take any assignment no matter the price, commission, or conditions. This is why they have so many listings, because they lay down to sellers. Eventually their bait-n-switch tactic works and a handful of deals sell, so they turn on the PR machine and pride themselves as the #1 sales firm. Simply put to any readers claiming they are the only ones doing deals, MK specializes in small multi-family in NYC. It just so happens that property type is the only thing trading right now. Kudos to Bob for getting lucky in the recession. But when office, hotel and development start trading and banks begin lending, they are a second-tier firm with inexperienced brokers (ask an MK broker how to do an off-market deal and they will be dumbfounded). Good luck Bob and hopefully your agents are ready for the next wave.
Comment #10 Posted By: Anonymous 07/29/09
Anonymous
"I am not an MK hater", but I'll write a paragraph on why they suck. You call him a whore now, but the entire brokerage industry will be "laying down to sellers" soon enough. It's called competition. I guess you have never seen the downside of a business cycle. Good luck.
Comment #11 Posted By: Anonymous 07/29/09
Anonymous
Massey Knakal # 1
Comment #12 Posted By: Anonymous 07/29/09
Anonymous
they give this nice report, try to buy from them at this price level, good luck!
Comment #13 Posted By: Anonymous 07/29/09
Anonymous
The conclusions from this report are idotic and something right out of a 4th grade math class. All these sales figures are meaningless because sales were down EIGHTY-TWO percent! Going forward, brokers and developers need to recognize that it will take a different skill set to produce in a declining market. Bullsh#t isn't going to work. Brokers who can size up their clients and who are persistent will survive.
Comment #14 Posted By: Anonymous 07/29/09
Anonymous
MK is no different from any other firm - we are all victims of THE SELLERS. THEY dictate their sale prices, and so brokers have the option to either take the listing at the seller's fantasy price & then hope the seller finally wakes up, or else walk away and let some other broker "get lucky" after months of suffering at the insane list-prices. What can any broker do? Seller's think they know everything - what could a broker possibly know? We're all up against the same nonsense, AKA human nature -- so we're all trying to get around it somehow and get some properties sold, MK included....
Comment #15 Posted By: Anonymous 07/29/09
Anonymous
If only more real estate companies in NYC would have the transparency that MK shows in their dealings. I don't see Eastern Consolidated or Newmark showing the income and expense profiles. MK should be commended and is a model for the real estate industry here!
Comment #16 Posted By: Anonymous 07/29/09
Anonymous
amen 17 - it is NOT the brokers - and yes, I am a sales broker, not at MK. The greed and high expectations of the owners (I wouldnt even call them sellers, becuase they would never admit to selling) knows no limit in New York. For years, they priced in the buyer's profits in the sale price (as if it was so easy to build, or renovate, or get new tenants, etc) even though they didnt do squat with the property, except own it (usually be luck of having inherited it).
Comment #17 Posted By: Anonymous 07/29/09
Anonymous
# 18 is right. Massey good. Newmark & Eastern bad
Comment #18 Posted By: Anonymous 07/29/09
Anonymous
Oh Bobby, I love you too
Comment #19 Posted By: Anonymous 07/29/09
Anonymous
Mayor is a great idea. with his quick wit, winsome smile and and near genius ability to deal with complex issues he could truly give bloomberg a run for the money.
Comment #20 Posted By: Anonymous 07/29/09
Anonymous
massey knakal is not for sale.... or any "part" of it bob and paul have the best platform in town, and all their agents are trained and board certified
Comment #21 Posted By: Anonymous 07/29/09
Anonymous
# 16, your conclusions are idiotic.bob is one of the finest commentators on the real estate scene. his grasp of economics is awesome. he went to Wharton. he is too modest to say this, but he has endowed several chairs there
Comment #22 Posted By: Anonymous 07/29/09
Anonymous
Bob is a genius like robert moses or bill zeckendorf. its not unusual for mere mortals to misunderstand them. bobs humility allows him to take it all in stride
Comment #23 Posted By: Anonymous 07/29/09
Anonymous
I heard he is being considred for the new secty of HUD, the FBI has been snooping around doing background checks and such
Comment #24 Posted By: Anonymous 07/29/09
Anonymous
bobs genorosity is legendery
Comment #25 Posted By: Anonymous 07/30/09
Anonymous
so is his patience.he's sat next to paul for all these years, and never a harsh word between them.
Comment #26 Posted By: Anonymous 07/30/09
Anonymous
God Bless Bob, he is providing the insight and leadership that is needed to work through this economic crisis
Comment #27 Posted By: Anonymous 07/30/09
Anonymous
Bob's loyalty to his friends is in a class of its own
Comment #28 Posted By: Anonymous 07/30/09
Anonymous
Bob has made millions for his staff and partners.
Comment #29 Posted By: Anonymous 07/30/09
Bob n weave
the Chairman is so popular and respected that millions of parents around the world have named their sons, daughters and even pets, BOB
Comment #30 Posted By: Bob n weave 07/30/09
MK Full Of IT
Could the MK shills who obviously work for the company stay off the message board. nobody is fooled. the prices properties are listed for at MK is ridiculous. MK tell sellers they can get them their fantasy price.If they tell them what the property is worth they will not get the business. this is not a business for honest people.
Comment #31 Posted By: MK Full Of IT 08/02/09
Anonymous
This is a bloodbath. NYC economy will collapse. Think of all the people that must be underwater right now.
Comment #32 Posted By: Anonymous 08/02/09
sponge bob
life is good underwater
Comment #33 Posted By: sponge bob 08/02/09
fast tow
this is brilliant work Bob, all the best, Andy
Comment #34 Posted By: fast tow 08/04/09
mao
Fellow Chairman: you are to be commended for your cleverness. How is the 5 year plan going ?
Comment #35 Posted By: mao 08/04/09
Debt Settlement Program
punctilious post. simply one detail where I contest with it. I am emailing you in detail.
Comment #36 Posted By: Debt Settlement Program 08/10/09
Anonymous
Most people think Bob is smiling in the picture. the reality is, he has had so much plastic surgery that his face is stuck in that silly grin mode. the long hair and beard are there to cover the scars.
Comment #37 Posted By: Anonymous 08/20/09
Anonymous
city records make a news story ? knakal took public data and cals it a report ? he has to have 5 pr agents working full time rumor has it that a fed up insider is shopping a tell all story, when that happens, bob will be appearing on jerry springer
Comment #38 Posted By: Anonymous 08/30/09