New York City Commercial Property Sales May Rise 50% in 2011, Knakal Says
Commercial property sales in New York City may rise as much as 50 percent this year while demand intensifies before an expected interest rate increase, said Robert Knakal, head of Massey Knakal Realty Services.
“You have all this capital looking for property,” Knakal, chairman of the New York-based brokerage, said today in a presentation to reporters. “Most of our investors think we’re going to have inflation.”
The dollar amount of sales this year may approach the $25 billion in deals across the city in 2008, when the collapse of Lehman Brothers Holdings Inc. (LEHMQ) froze the commercial real estate market, Knakal said. Values will increase as investor demand to buy while interest rates are low outpaces the availability of properties for sale, he said.
About $14.5 billion in commercial property -- including office buildings, apartments and retail spaces -- changed hands last year, Massey Knakal data show.
The number of commercial properties sold in New York this year may climb to 2,100, a 25 percent increase over 2010, Knakal said. Investor demand for retail properties may drive values up more than 30 percent on a price-per-square-foot basis.
In Manhattan, where demand is highest, the average price per square foot of all commercial properties may increase 12 percent this year, according to Knakal’s forecast. Office values in the borough may jump 20 percent, he said.
The dollar volume of commercial property sales citywide increased 45 percent in the first quarter from a year earlier, to $3.9 billion, according to a report released today by Massey Knakal. Of that amount, $3.1 billion in sales were in Manhattan, up 40 percent from a year earlier.
Dollar volume slipped 37 percent in the borough from the fourth quarter, when sellers rushed to complete deals before an expected increase in the capital-gains tax rate that didn’t materialize, Knakal said. Fourth-quarter transactions totaled $4.8 billion in Manhattan and $5.6 billion citywide, the highest quarterly volume in two years, according to Massey Knakal.
To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
Rate this Page