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Building Sales Market Reflects Strength, Not Economic Fear: Experts

NEW YORK CITY-Slowing increases caution, but most industry pros tell GlobeSt.com that industry insulation from economic doubts protects the sales market as well.

By Steve Viuker | Updated on December 11, 2000

NEW YORK CITY-Recently, 14 Wall Street was pulled off the market after bids fell short of expectations. Is that a signal that the good economic times are may be waning and maybe it’s time to take the money and run?

“You have to look at the leasing market,” says Robert Martin, senior managing director at Insignia/ESG, “and how rents went up by 30 to 40% in the last 12 months. Owners knew they were in an up cycle and decided it would be a good time to sell. There was a great demand for properties a year or so ago. And many who are not long-term players were looking at the shorter-term horizon.” “Much of the property on the market is there because of the healthy economy and the high prices. And with the economy slowing, you have less buyers and cautious buyers. Sometimes it makes more sense to keep a property and get the return they want,” Martin continues. “As for trophy properties, this is a historic time. I don’t recall this many prime class A properties on the market. People are still buying, but just being more cautious.”

“I would suspect that as there is greater volatility in the financial markets, it would have to cast some pall on our market,” says Bob Freedman, vice chairman of GVA Williams. “The investment sales market is a function of supply and demand and it’s a function of access to capital markets. However, the investment sales market does not always corrolate to the office leasing market, although they are quite consistent.”

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