Manhattan CRE deals hit lows not seen since 2009

Just 21 commercial sales recorded in the borough in Q3

New York /
Oct.October 06, 2020 11:05 AM
522 Fifth Avenue and 1375 Broadway (Google Maps)

522 Fifth Avenue and 1375 Broadway (Google Maps)

Commercial real estate sales in Manhattan have taken a major hit because of the pandemic.

There were just 21 commercial real estate transactions in the borough in the third quarter of 2020, according to Bisnow, citing Avison Young’s quarterly report. That’s the lowest number of deals recorded since the third quarter of 2009, in the aftermath of the Great Recession.

And even between the second and third quarter, sales slid by 30 percent, according to Bisnow.

Sales volume in Manhattan in the third quarter declined to $1.1 billion, a 74 percent decrease from the previous year. Two deals accounted for a good chunk of that: Savanna’s deal to buy 1375 Broadway for $435 million in July from Westbrook Partners, and RFR Realty’s purchase of 522 Fifth Avenue from Morgan Stanley for $350 million. Those deals were under contract prior to the coronavirus.

There were also big drops for property types within the commercial sector: Development sales volume totaled $141 million, a 56 percent drop from the previous year. Retail saw only one transaction during the quarter, a $1.5 million deal sold in foreclosure, according to Bisnow.

And in the multifamily market, there were just nine sales in the third quarter totaling $121 million, an 82 percent decline from the previous year.

If this downward trend continues, commercial sales volume could total $8.4 billion in 2020, according to Avison Young principal James Nelson. That would be a 69 percent drop from the 10-year average.

[Bisnow] — Keith Larsen 


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