Pent-Up Demand Fuels Interest in Trophy Assets

NEW YORK CITY-Office space in Midtown, particularly on Park Ave. has long been considered a premium asset. A site such as the nearly 1.4-million-sf 230 Park Ave., which was recently placed on the market, inevitably brings interests from a variety of potential investors.

“Demand is very strong. There is a pent-up demand for office space,” says Jon Caplan, executive director of Cushman and Wakefield’s New York Capital Markets Group. “There are only a handful of Midtown trophies. It (230 Park) can draw tremendous response from a diverse group of buyers. It’s an icon in Midtown.” According to C&W figures, 2005 sales are on track to exceed last year’s record (Last year, there was a sales volume of $15.1 billion; the prior record was $12 billion in 2001.)

Caplan notes that though, private capital has been the dominant player of late in New York City asset sales, often when the asset has such as high price tag, it’s necessary for the investor to team with other capital sources. Private capital dominated the market in 2003, 2004 and 2005 year to date at 46%, 59% and 67%, respectively, of total sales volume, according to C&W statistics.