Midtown office buildings now 10% pricier than pre-crisis: report

Growth driven in part by historically low bond yields

New York /
Apr.April 07, 2015 04:05 PM

Midtown office property values are now about 10 percent higher than at their pre-crisis peak in 2007, despite fears of a strengthening dollar and a still-shaky global economy, according to New Research From Green Street Advisors.

Green Street’s Manhattan Office Price Index shows Midtown property values grew by 1 percent in the month of March, and by about 20 percent over the past year. The index calculates property values based in part on conversations with brokers and real estate executives, which the firm claims allows for a more immediate reflection of property values than closed sales, which tend to reflect prices from several months ago.

“Midtown office values seem poised to continue their upward trend amid strengthening market fundamentals and robust capital flows,” the report states. With bond yields at historic lows, real estate returns are relatively more attractive to investors, the report notes, and this has helped drive the growth.

The report does state, however, that the combination of a strengthening dollar and falling oil prices “warrants monitoring.”

Investors continue to scramble to buy trophy office properties in Midtown. Canadian investment firm Ivanhoe Cambridge, for example, dished out $2.2 billion for the Blackstone Group’s 1.2 million-square-foot office tower 3 Bryant Park, a deal that closed in January. And today, news broke that developers Michael Shvo  and Vladislav Doronin are paying $475 million for the majority of the Crown Building at the corner of Fifth Avenue and 57th Street – a deal struck at an impressive $1,724 per square foot.


Related Articles

arrow_forward_ios
Manhattan sublease surge shows signs of slowing
Manhattan sublease scourge finally abates
Manhattan sublease scourge finally abates
Employers project 62 percent of workers will come back to Manhattan offices in September (iStock)
Over 60% of Manhattan office workers will return in September: survey
Over 60% of Manhattan office workers will return in September: survey
Manhattan’s office availability rate hit an all-time high in May. (Getty)
Manhattan office availability keeps on climbing
Manhattan office availability keeps on climbing
SL Green’s Marc Holliday and 711 Third Avenue. (SL Green)
Connecticut hedge fund takes 20K sf at SL Green’s 711 Third Avenue
Connecticut hedge fund takes 20K sf at SL Green’s 711 Third Avenue
President & CEO of Northwood Investors with 520 and 524 Broadway. (Getty, Google Maps)
Northwood buys two Soho buildings for $325M
Northwood buys two Soho buildings for $325M
Paramount CEO Albert Behler and 60 Wall Street (Getty, Paramount Group)
Paramount Group plans $250M facelift for 60 Wall
Paramount Group plans $250M facelift for 60 Wall
1540 Broadway and 31 West 52nd Street (Google Maps, Hines)
Manhattan office availability hits record high…again
Manhattan office availability hits record high…again
Vornado’s Steve Roth with Penn1, Penn 2 and the Farley Building (Getty, VNO)
Vornado’s Roth “disappointed” in lack of distress as market shows signs of recovery
Vornado’s Roth “disappointed” in lack of distress as market shows signs of recovery
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...