Mary Ann Tighe on “perfectly good” Third Avenue office buildings, frozen land market

CBRE broker says buyer and seller expectations are out of whack

New York /
Aug.August 10, 2016 12:45 PM

CBRE top producer Mary Ann Tighe says New York City commercial owners are reluctant to adjust their prices after seven years of positive market growth.

“So many buildings have traded and so many proformas have been reset that there’s a tremendous reluctance to reprice even if there’s a suggestion that you might,” she said, speaking Tuesday on CNBC’s Squawk Box. “Land trades are frozen right now — the seller/buyer expectations are completely out of whack.”

As such, prices remain historically high.

“I would have said to you last year that cap rates couldn’t go lower,” she said. “Average cap rates last year were around 4.5 percent. We’re actually at a lower cap rate in Manhattan this year.”

For a good deal, Tighe says she’s been directing tenants to Third Avenue, where rents have remained more palatable. But the suggestion doesn’t always receive a good reception.

“When people ask me where the bargains are, I say Third Avenue. They’re like, ‘Oh no, not Third Avenue,’” she said. “I think it’s Because Third Avenue represents a different era architecturally. Emery Roth, who’s a great architect, built many many buildings along Third. They’re all perfectly good office buildings but what people want today is either new or something that has character and is retrofitted so it feels like it’s new.” — Katherine Clarke


Related Articles

arrow_forward_ios
Industrious CEO Jamie Hodari and CBRE chief financial and investment officer Emma Giamartino (LinkedIn, CBRE)
CBRE doubles down on flex-office provider Industrious
CBRE doubles down on flex-office provider Industrious
Savills' Jim Wenk (LinkedIn, iStock, Illustration by Kevin Cifuentes for The Real Deal)
Office space up for sublease back on the rise
Office space up for sublease back on the rise
CBRE's Chuck Leitner and Amazon warehouses at 12555 Flatlands Avenue and 12595 Flatlands Avenue (March Associates Construction, CBRE, iStock, Illustration by Kevin Cifuentes for The Real Deal)
CBRE affiliate buys two Amazon warehouses for $230M
CBRE affiliate buys two Amazon warehouses for $230M
CBRE's Chris Bodnar (CBRE, iStock)
Healthcare real estate investment expected to hit $25B this year: report
Healthcare real estate investment expected to hit $25B this year: report
Nelson Lee and Eric Anton of Marcus & Millichap (REBNY)
Karaoke and bees: Marcus & Millichap wins REBNY’s most “ingenious deal”
Karaoke and bees: Marcus & Millichap wins REBNY’s most “ingenious deal”
(iStock)
As rents drop, Manhattan retail spaces are filling up
As rents drop, Manhattan retail spaces are filling up
World Class Holdings' Nate Paul (World Class, iStock)
Nate Paul plots comeback after selling chunk of self-storage holdings
Nate Paul plots comeback after selling chunk of self-storage holdings
Nate Paul of World Class Holdings and one of his Great Value Storage facilities (Great Value Storage, iStock)
Controversial Austin developer Nate Paul sells self storage portfolio for $588M
Controversial Austin developer Nate Paul sells self storage portfolio for $588M
arrow_forward_ios

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

Loading...