Midtown Manhattan office-building price gains have outpaced those in London’s West End as investor demand for New York properties sends values above the highs before the financial crisis.
Office prices in Midtown have more than doubled since their trough in the fourth quarter of 2009, Moody’s Investors Service said in a report today. West End prices climbed 65 percent from their low in the third quarter of that year, according to the report. The West End, which includes the districts of Mayfair and St. James’s, has the most expensive office rents in the U.K. and is home to Europe’s largest concentration of hedge funds.
“The recovery in midtown Manhattan office prices has been much stronger post-crisis than its London counterpart, the West End,” Moody’s said in the report today. “New York’s comparatively stronger post-crisis employment growth has contributed to its stronger office price growth.”
Recent deals for Midtown skyscrapers have approached or exceeded peak levels reached in 2007, before the credit crisis caused values to plummet. In the past two weeks, buyers agreed to pay about $2,100 a square foot, a record, for 650 Madison Ave., and a 40 percent stake in the General Motors Building was acquired at about $1,700 a square foot. RXR Realty agreed to buy a 49 percent share of Worldwide Plaza for $660 million, more than its owners paid for the entire tower in 2009, two people briefed on the deal said last week.
Office prices in Midtown are now 19 percent more than their highs before the market crash, while prices in the West End are 6 percent higher than the peak, Moody’s said in the report.
The New York area has returned to its pre-crisis level of 8.6 million jobs, while London is about 250,000 positions short of its peak of 7.8 million, according to the report.