Manhattan I-sales haven’t been this bad since the year Lehman collapsed

Deal volume falls 45% year-over-year to $4.36B in Q3: CushWake

New York /
Oct.October 20, 2017 04:35 PM

Manhattan investment-sales volumes continued to fall during the third quarter of the year, setting 2017’s total on course to be lower than it was in 2008 when Lehman Brothers collapsed.

Commercial property sales across the borough clocked in at $4.36 billion over the past three months, a 45.4 percent decline from the same time last year, according to third-quarter figures from Cushman & Wakefield. That brings the total for the first three quarters of 2017 to $14.37 billion, or 54.6 percent below the $31.66 billion recorded during the first nine months of 2016.

That puts Manhattan on track in 2017 to finish below the $19.8 billion the investment sales market saw in 2008. That’s not to say conditions are similar now to what they were back then, but 2017 does face its own set of challenges.

When Lehman Brothers collapsed, the capital markets dried up and trades ground to a halt. This time around, sales have slowed to a trickle after the market hit a peak of $59.9 billion in sales in 2015 and started to decline as buyers turned their noses up at paying record prices. At the same time, the robust debt markets make it easier for owners who can’t reach their price in the sales market to refinance properties and hold.

One other major difference: Amid the Great Recession, asset prices for all property types fell. Through the first half of the year, the average price for commercial properties traded across the city rose 3 percent on the year to $570 per square foot.

But the increase wasn’t across the board. Property types like land and hotels that are more sensitive to shifts in the market saw pricing decline, while multifamily, mixed-use and office buildings saw pricing increase.

The largest deal of the quarter came in August, when Trinity Real Estate paid $580 million to buy the leasehold at the 1.1 million-square-foot office building anchored by advertising agency Saatchi & Saatchi at 375 Hudson Street in Hudson Square from Tishman Speyer, according to Real Capital Analytics.

Maefield Development, Fortress Investment Group and L&L Holding paid $200 million in July to buy the Doubletree Suites hotel condo at 1568 Broadway from the Nederlander Organization. And in September, Aby Rosen’s RFR Realty bought the residential hotel at 90 Sands Street in Brooklyn from the Jehovah’s Witnesses for $135 million.

Kushner Companies had previously been a partner on the deal when it went into contract, but exited before closing.


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)
Here’s what the $10M-$30M NYC investment sales market looked like last week
Here’s what the $10M-$30M NYC investment sales market looked like last week
Billionaire entrepreneur Mark Cuban (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
Mark Cuban: Metaverse real estate is the “dumbest sh*t ever”
Mark Cuban: Metaverse real estate is the “dumbest sh*t ever”
From left: Century Development's Group’s George Xu and City/Rybak Development’s Sergey Rybak with 78-29 Austin St./11-36 45 Road
Rybak, Century file to build Queens multifamily projects
Rybak, Century file to build Queens multifamily projects
212 Fifth Avenue, Thor's Joseph Sitt and Madison Equities CEO Robert Gladstone (Google Maps, Thor, Studio Scrivo)
Thor sues insurer over Bob Gladstone’s alleged theft from 212 Fifth
Thor sues insurer over Bob Gladstone’s alleged theft from 212 Fifth
61-01 Springfield Avenue in Bayside with Skyline Properties’ Robert Khodadadian and Daniel Shirazi (Google Maps)
Bayside shopping center goes for $32M to lead mid-market sales
Bayside shopping center goes for $32M to lead mid-market sales
Equity Distribution Acquisition Corp. chairman Sam Zell (Getty)
Zell-backed SPAC fizzles
Zell-backed SPAC fizzles
Jean-Georges Vongerichten and 99 Prince Street in Manhattan NYC (Getty Images, Google Maps)
Jean-Georges’ Mercer Kitchen closing after 25 years
Jean-Georges’ Mercer Kitchen closing after 25 years
Marx Realty president Craig Deitelzweig and 545 Madison Avenue (Marx Realty, Google Maps, Getty Images)
Milstein’s real estate firm extends at 545 Madison Avenue
Milstein’s real estate firm extends at 545 Madison Avenue
arrow_forward_ios

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

Loading...