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Land Prices Taking Post-Sept. 11 Lumps

NEW YORK CITY-Land prices in the city and suburbs have become difficult if not impossible to predict following the September 11 attacks on the World Trade Center. Sector by sector and block by block, land values are changing on a daily basis.

By Glen Thompson | Updated on December 17, 2001

NEW YORK CITY-According to real estate investment banking firm Granite Partners LLC, the only certainty when it comes to the price of land in New York City is that nobody knows what its worth. “With land today, you’re going to be wrong no matter what, because it changes daily,” Granite senior managing director Jerry Mason says. “It’s hard to determine where you are.”

“When we did the JFK Marriott in 1999 we came out of the ground at $22,000 per key,” Mason says, referring to the cost of land per hotel room. “I don’t think you could get close to that today. You’d be looking at a 10% discount at least. Having a site next to an international airport doesn’t mean much today.”

In Manhattan, land for hotel development, if it were available, “would be $100,000-plus per key,” Mason says, referring to the cost per room. But even those numbers are shots in the dark, he adds. “We don’t know where the number is. It could be that you can’t even establish a number today. We don’t have a reasonable comp after Sept. 11 to say this is where land should trade.”

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