NEW YORK CITY-Manhattan’s investment sales market thus far in 2009 has been a fraction of its customary size, and is on pace to go down as the lowest-volume market in at least 25 years, says a new report from Massey Knakal Realty Services. One number that is up is the percentage of sales under $25 million, which represent 92% of the $3.2 billion in closed transactions year-to-date. In the first three quarters of 2008, the under-$25-million segment represented 80% of the market.

“That’s a very clear indication that the average transaction is getting smaller,” said Massey Knakal chairman Robert Knakal during a media briefing Tuesday. Also getting smaller, at least temporarily, are most of the other indicators for investment sales, although Knakal said that’s subject to change in the near future.

Prices per square foot fell across the board in ’09 compared to a year earlier, declining anywhere from 16% for multifamily properties to 62% for office buildings, Massey Knakal’s third-quarter report says. For well-leased office properties, though, the price drop-off was considerably shallower: 25%, compared to 70% for problem properties.

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