NYC Commercial Real Estate Sales Drop in 1st Quarter of 2017
For the first quarter of 2017, New York commercial real estate sales fell in every property-type category, from office buildings to hotels. The number of transactions was down by 6%. More notably, the value of transactions decreased 39% compared to the same period last year, declining significantly in every borough except for Staten Island. The total Sales for the first 6 months of 2017 was approximately $18 billion, down from $29.5 billion in the same period 2016, as per a report from the Real Estate Board of New York. Since the organization began tracking commercial property sales in 2014, transactions hit a peak of $37 billion in the first half of 2015, according to the report.
“There is a slowdown in activity, certainly in terms of high-priced sales,” said Michael Slattery, a senior vice president at the Real Estate Board of New York. The drop in dollar volume as well as the number of transactions hint at investor uncertainty, said Slattery. Apprehension about rising interest rates also played a part in the slump.
Even with the big ticket $2.2 billion sale of the office tower at 245 Park Avenue, office deals dropped 40% to $7.3 billion in the first half of the year. Multifamily rental buildings with elevators, which is generally a stable sect, experienced a 51% drop to $1.9 billion. Vacant land, gas stations, and garages were among the only category in which both total sales amount and the number of transactions did not decline in unison. Total sales for the category fell 46% to $919 million, but the number of deals increased 25%, signifying the properties sold this year were less valuable in comparison to last year.
For the first half of 2017, Staten Island was the only borough to break the trend with an increase in commercial real estate sales. Commercial sales rose 61% to $300 million. The number of transactions also rose 23 percent from the previous year, to190. Sales were led by the category of garages, gas stations and vacant land, as well as industrial and retail properties. These categories made up 89 percent of the total dollar amount in sales, with no multifamily rental buildings sold.
Even with the big ticket $2.2 billion sale of the office tower at 245 Park Avenue, office deals dropped 40% to $7.3 billion in the first half of the year.
Even with the big ticket $2.2 billion sale of the office tower at 245 Park Avenue, office deals dropped 40% to $7.3 billion in the first half of the year