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Office Sales Outlook Improves

NEW YORK CITY-CB Richard Ellis says the Manhattan investment sales market will see an uptick in volume and pricing as soon as this year.

By Paul Bubny | Updated on March 24, 2010

NEW YORK CITY—Manhattan’s office investment sales market, which suffered a 91% peak-to-trough dollar volume drop in 2009, will show marked improvement as early as this year, according to CB Richard Ellis analysis. The report issued Wednesday forecasts more transactions, higher pricing and compressed cap rates during 2010.

In particular, cap rates are forecast to range from 5.5% to 6% for a stabilized, class A office property. By comparison, cap rates were estimated between 6.5% and 7.5% nine months ago, CBRE says.

Hand in hand with cap rate compression will be a gradual decline in vacancy and uptick in asking rents. Already, the report says, these factors have begun to settle down compared to the sharp declines experienced in ’09. “As all of the market fundamentals stabilize, it will make investors more confident,” Sean White, senior research analyst at CBRE and lead author on the report, tells GlobeSt.com.

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