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Office Investment Remains Strong

NEW YORK CITY-With properties here trading at top dollar, the competition for office investment remains high. So far this year, $8.7 billion in value has changed hands.

By Barbara Jarvie | Updated on July 05, 2006

NEW YORK CITY-With 1211 Ave. of the Americas trading more than $800 per sf and 55 Broadway going for $82 million, the investment climate here is strong. According to Trammell Crow, over the past six months, the Manhattan office market has seen very strong investment sales activity with $8.7 billion tradedthrough June. This represents nearly 50% more than the typical volume.

Beacon Capital teamed with Lehman Bros to take the 1.9-million-sf asset out of Jamestown’s portfolio. Douglas Harmon of Eastdil was the exclusive broker for the sale.

Trammell Crow estimates that office rents have been gradually increasing as vacancy rates slowly decline and now interest rates have extended the current real estate cycle by driving yields. For investor groups, returns on real estate have continued to outperform alternative investments, such as the stock and bond markets. Until the contrary occurs, and an upward swing in interestrates could exacerbate such a shift, capital from these groups will continue to pour into real estate and drive activity. Offshore investors –mostly Australian, German, Middle Eastern and Israeli–-continue to invest here.

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