Commercial sales drop 31 percent

Sales of commercial properties were 31 percent lower in the first half of 2008
in Manhattan, Brooklyn, Queens and the Bronx compared to the same period last
year, according to a report released by Massey Knakal Realty Services today.

The largest decline in the number of sales was in northern Manhattan, where sales volume fell by 63 percent, and the
smallest decline was in Queens, where sales
dropped by 18 percent, the report, prepared by Miller Cicero, said.

In the same period, consolidated median prices fell by 5
percent to $222 per square foot compared to a year earlier. The report only looked
at sales over $500,000.

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Meanwhile, the median capitalization rate rose year-over-year to 5.8 percent
from 5.5 percent while the gross rent multiple dropped to 11.5 from 12.4.

“Given rapidly rising expenses in multifamily properties, investors are
starting to rely more heavily on cap rate analysis rather than traditional
[gross rent multiple] analysis,” Robert Knakal, chairman of Massey Knakal,
said in a statement. “The value of in-place income has increased recently
and has made financing more feasible.”