Manhattan commercial real estate market has recovered, survey shows

TRD New York /
Mar.March 21, 2011 04:05 PM

The capitalization rate of Manhattan office buildings continued to decline in the first quarter of 2011 and now sits at a nation-wide low 6 percent, according to a PricewaterhouseCoopers survey of investors. The next lowest cities were Washington (6.48 percent), San Francisco (7.39 percent) and Los Angeles (7.44 percent).

The capitalization rate measures the rate of return on investment that a buyer can expect after one year of ownership. Manhattan’s capitalization rate in the fourth quarter of 2010 was 6.02 percent, and it was 6.65 percent during the first quarter of last year, Crain’s reported. The steady descent is indicative of an improving commercial real estate market. Investors’ returns decrease as real estate prices increase — a function of high demand in the commercial market. The survey shows most investors to believe that the capitalization rate will hold stead in the near future. This follows reports from earlier in the month that anticipated commercial real estate purchases across the nation in 2011 would double over the 2010 rate. [Crain’s]


Related Articles

arrow_forward_ios
Breather CEO Bryan Murphy (Credit: LinkedIn and iStock)

Breather bloodbath: Flex-office startup fires 17% of staff

Stephen Levin, REBNY's Jim Whelan and Brad Lander (Credit: Getty Images)

The bill that won’t die: Will commercial rent control finally pass?

Softbank CEO Masayoshi Son (Credit: Getty Images)

SoftBank’s $3B payout to WeWork’s investors is delayed

John Legere (Credit: Getty Images)

WeWork reportedly in talks to hire T-Mobile exec as CEO

(Credit: iStock)

Small Talk: Every community meeting. About every development project. Ever.

An example of roll-off waste management (Credit: YouTube, iStock)

A win for big building owners in trash-collection fight

Duke Long and Poshtel International CEO Morten Lund

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Council member Vanessa Gibson (Credit: New York City Council)

Commercial landlords face new fines as City Council passes anti-harassment bill

arrow_forward_ios