US commercial real estate prices take a dip in 2016

Cushman & Wakefield forecasts NYC investment sales volume to fall as much as 30%

New York /
Apr.April 14, 2016 01:07 PM

U.S. commercial real estate prices fell slightly in January and February driven by weakness in Manhattan, according to Real Capital Analytics data. The findings, along with a more pronounced drop in investment sales volume, are another warning sign that the market is slowing down.

“Anything that happens in Manhattan reverberates,” RCA’s Jim Costello told Bloomberg. Although commercial real estate prices overall fell by less than one percent each in January and February, prices for office buildings in major city centers have fallen by 5.2 percent since December.

Meanwhile, Cushman & Wakefield expects investment sales volume in Manhattan and surrounding boroughs to dip by as much as 30 percent in 2016 after a $75.5 billion year in 2015.

One culprit is weakness in the CMBS market, which has made it harder to finance acquisitions. “That type of debt is important for very large transactions,” Costello said. “Manhattan is an expensive place. Every deal is hundreds of millions of dollars.”

Still, observers argue that it’s too early for concern. “Pricing is slightly off the peak in certain circumstances,” said Doug Harmon, a broker at Eastdil Secured. “But those prices are still sensational.” [Bloomberg]Konrad Putzier


Related Articles

arrow_forward_ios
The price of a new home in China’s largest cities fell for the first time since 2015
New home prices in China’s largest cities fall for first time since 2015
New home prices in China’s largest cities fall for first time since 2015
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Terreno Realty CEO W. Blake Baird and an aerial of the property (Google Maps)
Terreno Realty pays $44M for NJ industrial site
Terreno Realty pays $44M for NJ industrial site
Madison Realty Capital Co-Founders Josh Zegen and Brian Shatz with a rendering of the River North development (Madison Realty Capital, FXCollaborative)
Madison Realty’s altered plans for SI complex approved
Madison Realty’s altered plans for SI complex approved
Pandemic forces mom-and-pop landlord to sell out
Pandemic forces mom-and-pop landlord to sell out
Pandemic forces mom-and-pop landlord to sell out
PBC's Eli Elefant and 452 Fifth Ave (PBC)
Elefant’s PBC to liquidate $2B in US real estate, including HSBC building
Elefant’s PBC to liquidate $2B in US real estate, including HSBC building
Chinese developer willing to sell Manhattan supertall site at big loss
Chinese developer willing to sell Manhattan supertall site at big loss
Chinese developer willing to sell Manhattan supertall site at big loss
SL Green CEO Marc Holliday, Chelsea Piers Fitness CEO David Tewksbury and One Madison Avenue (Getty, SL Green)
Chelsea Piers is coming to SL Green’s One Madison
Chelsea Piers is coming to SL Green’s One Madison
arrow_forward_ios

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

Loading...