Scarcity of office condos drives up prices

Only 300,000 square feet of space exists citywide, some of it set aside for particular tenants
August 26, 2013 04:43PM

A surge of sales and corresponding lack of supply is driving up the prices of New York City’s office condominiums.

Only about 300,000 square feet of available office condo space exists citywide, and that dearth of supply has nudged prices up 30 percent from the second half of 2012, according to a July market report from Rudder Property Group.

Pricing for condo space hit $631 per square foot in the first half of 2013, the report said.

“We need more product,” Michael Rudder, who operates the eponymous brokerage, told Crain’s.

Aside from the meager space available, there are two large commercial condo buildings that are designed for specific types of tenants: 40 Rector Street and 50 West 47th Street.

The two specialist properties, between them, now hold 60 percent of the city’s available condo space. The former, with more than 30,000-square-foot floor plates, is tailored for large tenants, and the latter, Extell Development’s International Gem Tower, offers space only to diamond and other jewelry tenants.

“If you’re not a jewelry tenant and you’re not 25,000 or larger in size, you really aren’t looking for space in those buildings,” Rudder told Crain’s. “And right now, there’s really not too many other locations to go. We’re talking to developers to create new condo projects.”

Other buildings that had condo space on offer in recent months, Such As 131 West 33rd Street and 70 West 36th Street, have since sold out. [Crain’s]Julie Strickland