The Real Deal New York

Real estate execs: NYC’s commercial properties are overvalued

But they're probably worth it
June 13, 2014 03:20PM

Commercial property in New York City is overpriced compared to its counterparts elsewhere in the country. But, it’s probably worth it.

That was the conclusion drawn from a recent poll from the spring 2014 Gotham Commercial Real Estate Monitor, which surveyed New York City’s top commercial real estate professionals.

According to the survey, 47 percent of owners, brokers, agents, attorneys and accountants specializing in the commercial real estate sector, said that commercial properties in New York are “moderately overvalued” in comparison to property in other major cities, GlobeSt reported.

About a third of the execs felt that low interest rates were to blame for the over-the-top pricing, which they said is creating an asset bubble within the commercial market comparable to the housing bubble of 2005 to 2007.

Still, the majority of those polled said that in spite of the high expense, commercial property in Manhattan is a sound investment, with only four percent of executives citing it as a “high risk” endeavor. [GlobeSt]Sasha von Oldershausen

  • Hugh Kelly

    This is such an odd premise. “Overvalued…. but worth it”. Yes, New York real estate is expensive, but are investment prices out of synch with the revenue earned? It seems to me that they are pretty tightly matched. More significantly, though cap rates are about what they were pre-financial crisis, the “components” of the cap rate – most especially the debt/equity ratio – are much sounder now, as leverage has significantly lessened. All in all, I find this survey less than enlightening.

  • The Real Estate prices is exceeding in many parts of the Country and how just New York be said it is costliest in terms of real estate properties. Is there a comparison quote for the same if so please the above report.