Report shows 32 percent drop in Manhattan office condo sales

By Adam Pincus | February 08, 2010 03:00PM

Source: Time Equities

The dollar volume of office condominium sales in Manhattan slipped by nearly a third last year to its lowest level since 2005, a report released today by condo developer Time Equities shows.

The value of condos sold fell to $158 million in 2009, the weakest year since 2005 when just $49 million sold, the report, which covers 2009 sales data, shows. The volume in 2008 was $233 million.

The total amount of square feet sold fell by 42 percent to barely 220,000 last year from over 379,000 in 2008. As of the end of 2009, there were 8.2 million square feet of commercial condos in 76 buildings, Time Equities data show.

The report’s author Michael Rudder, director of sales and leasing for Time Equities, said the decline was representative of the broader sales market.

The drop, however, was not as steep as the overall 72 percent fall in Manhattan building sales volume last year as reported last month by commercial sales firm Massey Knakal Realty Services.

The Manhattan commercial condo market is far smaller in comparison to building sales. Even after the sharp drop last year, there were still $4.2 billion of buildings sales in Manhattan, the Massey Knakal report shows.

While overall the average price per square foot increased by 17 percent to $719 per foot, according to the Time Equities report, Rudder cautioned that more than two-thirds of last year’s dollar volume was from 43 sales at one building in Chinatown at 139 Centre Street. Excluding that deal, the price per foot fell 4 percent to $587 per square foot, he said.

He anticipated the volume of transactions to rise over the coming year but the price per foot to remain flat.

“I expect the market to remain at about the $587 [per square foot] number for the next 12 months. But I expect more transactions to be done,” Rudder said.

The increase in sales Rudder anticipated will be fueled in part by financially-strapped owners who will convert and sell parts of their buildings as commercial condos as a way to pay down their loans, he said.

Rudder was not aware of any condo conversions that had been completed in the current downturn, but said there were some in the works.

“We are out there meeting with owners and lenders,” he said.

The report was the second on office condos prepared by Time Equities, which published its first study, covering the first half of 2009, in September 2009.