“The outlook for New York is much worse than what we see outside New York,” said Sam Chandan, the president of Real Estate Economics, a research company in New York. Some people estimate that values in some cases have fallen as much as 50 percent. At the peak of the market in 2007, prime Midtown towers traded for nearly $800 a square foot, on average. Many buildings sold for $1,000 a square foot... [more]
“The outlook for New York is much worse than what we see outside New York,” said Sam Chandan, the president of Real Estate Economics, a research company in New York. Some people estimate that values in some cases have fallen as much as 50 percent.
At the peak of the market in 2007, prime Midtown towers traded for nearly $800 a square foot, on average. Many buildings sold for $1,000 a square foot or more. One office tower, 450 Park Avenue, at 57th Street, changed hands for nearly $1,600 a foot. These extravagant prices were based on the widely held belief that as leases expired, many spaces would fill up at rents well above $100 a square foot.
So what are Manhattan office buildings worth today? Since no substantial transactions have taken place in recent months, no one knows for sure. But some real estate specialists are willing to hazard estimates.
Robert Von Ancken, the senior appraiser for Grubb & Ellis in New York, estimated that prime Midtown buildings were now worth $425 a square foot, on average, while lesser buildings had a value of $350 a square foot, down from $500 to $600 a square foot two years ago. Mr. Von Ancken said he could not estimate how far values in Lower Manhattan had declined until more was known about the prospects for the financial services companies that occupy so much downtown space.
http://www.nytimes.com/2009/02/18/realestate/commercial/18value.html?_r=1&partner=rss&emc=rss[less]
Response by julia
about 17 years ago
Posts: 2841
Member since: Feb 2007
i see the downturn in residential rents...when will the downturn beging in co-ops/condos???
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Response by 10105
about 17 years ago
Posts: 123
Member since: Feb 2008
Julia,
Notice that few transactions are happening in office (and residential). It is an illiquid market that takes time to adjust. Over time, if there are no transactions, inventory will build and forced sellers will set the new market level.
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Response by 10105
about 17 years ago
Posts: 123
Member since: Feb 2008
... though it makes one wonder if 25% of peak will be a deal or a falling knife.
08/27/2007 - Previous sale closed for $1,565,000
12/23/2008 - Sale closed for $1,100,000
Im not a smart man, but for exact same unit to sell like this in a 14 month period, to me that looks like a 30% chop!
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Response by Topper
about 17 years ago
Posts: 1335
Member since: May 2008
I wonder to what extent the New York commercial and residential market has historically moved in synch or otherwise.
I also wonder if prime office space is just "naturally" less expensive on a price-per-square-foot basis than residential real estate.
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Response by nyc10022
about 17 years ago
Posts: 9868
Member since: Aug 2008
> Julia - begin? You kidding?
UD, don't even bother....
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Response by clancy
about 17 years ago
Posts: 2
Member since: Feb 2009
Does anybody have any idea how to go about finding medical office space and what the going rate is for that rental market?
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Response by Simeon
about 17 years ago
Posts: 10
Member since: Jan 2009
For medical space try craigs list or sharemedicalspace.com are places to look for space on the cheap it depends what you looking for
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Response by sniper
about 17 years ago
Posts: 1069
Member since: Dec 2008
i know that my office bldg management (midtown - right near 57th and park) wanted approx. $85 per foot when they started negotiations with us to renew our lease and we ended up at $55 per foot. this was back in november. not a huge luxury space but very nice and in a good bldg.
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Response by willie
about 17 years ago
Posts: 27
Member since: Feb 2008
Wife is looking for a space for her dental practice. She is currenlty paying $4000 for roughly 400 sqft of furnished space in midtown. We dont mind paying a bit higher but wanted it to be a good sized well maintained space with good price. Any ideas?
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Response by Simeon
about 17 years ago
Posts: 10
Member since: Jan 2009
what specialty are in you Clancy? Also what part of town do you want to be in?
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Response by clancy
about 17 years ago
Posts: 2
Member since: Feb 2009
Specialty is plastic surgery - just finishing fellowship this year. Checked out sharemedicalspace.com, and it looked great - do you know the going rate (with and without OR)? Re part of town: still open, although UES seems to be where most people have their private practices.
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Response by serge07
about 17 years ago
Posts: 334
Member since: Aug 2008
>wonder to what extent the New York commercial and residential market has historically moved in synch or otherwise.<
Topper, from 2000 through 1Q 2007, the market capitalization escalations of NYC commercial properties paralleled those of the residential market. The values of commercial properties have plummeted by some 65%-80& from peak to the present depending on the company.
The institutional investor group has clearly discounted the future & voted that the fundamental outlook for the next 12-24 months for those properties is troubling. Residential is historically much slower to adjust to the downside relative to the business sector which will adjust to fundamental realities closer to real time in fashion.
I also suspect that the commercial values will begin a slow recovery phase down the road while the residential continues a downward trajectory.
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Response by mbz
about 17 years ago
Posts: 238
Member since: Feb 2008
Topper, i'm no expert but I would imagine these have to move in tandem. Besides the indirect links (employment, etc) there is the direct link that office space can be converted into condos if market conditions warrant. Since all markets are priced on the margin it doens't take much overlap to ensure that the markets move in tandem.
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Response by Simeon
about 17 years ago
Posts: 10
Member since: Jan 2009
Clancy I have some concrete ideas on medical space if you like contact me at 150medicalspace@gmail.com
to discuss this further
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Response by Topper
about 17 years ago
Posts: 1335
Member since: May 2008
Thanks, Serge and mbz, for your insights.
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Response by serge07
about 17 years ago
Posts: 334
Member since: Aug 2008
Topper, you're welcome. :)
It's one of my fave forward looking indicators as to where all this may be headed.
i see the downturn in residential rents...when will the downturn beging in co-ops/condos???
Julia,
Notice that few transactions are happening in office (and residential). It is an illiquid market that takes time to adjust. Over time, if there are no transactions, inventory will build and forced sellers will set the new market level.
... though it makes one wonder if 25% of peak will be a deal or a falling knife.
25% off peak
Julia - begin? You kidding?
http://www.streeteasy.com/nyc/sale/228712-coop-444-central-park-west-manhattan-valley-new-york
08/27/2007 - Previous sale closed for $1,565,000
12/23/2008 - Sale closed for $1,100,000
Im not a smart man, but for exact same unit to sell like this in a 14 month period, to me that looks like a 30% chop!
I wonder to what extent the New York commercial and residential market has historically moved in synch or otherwise.
I also wonder if prime office space is just "naturally" less expensive on a price-per-square-foot basis than residential real estate.
> Julia - begin? You kidding?
UD, don't even bother....
Does anybody have any idea how to go about finding medical office space and what the going rate is for that rental market?
For medical space try craigs list or sharemedicalspace.com are places to look for space on the cheap it depends what you looking for
i know that my office bldg management (midtown - right near 57th and park) wanted approx. $85 per foot when they started negotiations with us to renew our lease and we ended up at $55 per foot. this was back in november. not a huge luxury space but very nice and in a good bldg.
Wife is looking for a space for her dental practice. She is currenlty paying $4000 for roughly 400 sqft of furnished space in midtown. We dont mind paying a bit higher but wanted it to be a good sized well maintained space with good price. Any ideas?
what specialty are in you Clancy? Also what part of town do you want to be in?
Specialty is plastic surgery - just finishing fellowship this year. Checked out sharemedicalspace.com, and it looked great - do you know the going rate (with and without OR)? Re part of town: still open, although UES seems to be where most people have their private practices.
>wonder to what extent the New York commercial and residential market has historically moved in synch or otherwise.<
Topper, from 2000 through 1Q 2007, the market capitalization escalations of NYC commercial properties paralleled those of the residential market. The values of commercial properties have plummeted by some 65%-80& from peak to the present depending on the company.
The institutional investor group has clearly discounted the future & voted that the fundamental outlook for the next 12-24 months for those properties is troubling. Residential is historically much slower to adjust to the downside relative to the business sector which will adjust to fundamental realities closer to real time in fashion.
I also suspect that the commercial values will begin a slow recovery phase down the road while the residential continues a downward trajectory.
Topper, i'm no expert but I would imagine these have to move in tandem. Besides the indirect links (employment, etc) there is the direct link that office space can be converted into condos if market conditions warrant. Since all markets are priced on the margin it doens't take much overlap to ensure that the markets move in tandem.
Clancy I have some concrete ideas on medical space if you like contact me at 150medicalspace@gmail.com
to discuss this further
Thanks, Serge and mbz, for your insights.
Topper, you're welcome. :)
It's one of my fave forward looking indicators as to where all this may be headed.