New York City-The investment sales market slowed down in the third quarter after a robust second quarter, with sales volume slipping to $7.5 billion from more than $9 billion, according to a new report from Eastern Consolidated.
Another noteworthy change was a positive one: office property sales had a strong showing, with the sale of three buildings—100 Broadway, 180 Water St. and 5 Hanover Square—compared to only one in the past 12 months. But hotel sales were lackluster: only one property traded hands in the quarter, compared to the more typical five or six transactions in a quarter.
Still, numbers don't tell the whole story, says chairman and CEO Peter Hauspurg about Eastern's Manhattan commercial property sales report. “The statistics for the third quarter do not accurately reflect the demand we are seeing. Investors have been very eager for listings and prices have reflected this intense demand. Recent uncertainty from the government shutdown may subdue volume in the fourth quarter, but any impact should be temporary, and prices should hold firm.”
In another surprise, multifamily sales declined, as did total sales the third straight quarter. The largest sale was a portfolio of 33 Upper Manhattan properties. Still, retail sales more than doubled after two quarters of lackluster activity—the largest sale was Nordstrom's retail condo at 225 W. 57th Street.
Meanwhile. development site sales increased in the quarter, doubling from $640 to $1.3 billion. The largest sale was 101 Murray St. in Tribeca, acquired by Fisher Brothers and the Witkoff Group from St. John's University. Uncertainty from the government shutdown could slow momentum in the fourth quarter, says the report, but impact is expected to be temporary.
“Our observation is that investors continue to be bullish about owning NYC real estate, as it's one of the safest investments for their capital,” says Barbara Byrne Denham, chief economist at Eastern Consolidated and the author of the report. “Acquiring and holding assets looks likely to keep prices steady and push them higher, as owners retain their investments until they appreciate to the point at which selling becomes a viable option.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
