NEW YORK CITY—If there was any doubt about the vibrancy of the city's CRE market last year, a new report is about to put those sentiments to rest. That's because the city bested many prior years in the investment sales market in 2014—by leaps and bounds—according to a new report from Cushman & Wakefield.

“2014 was the best investment sales market we have seen in the past 30 years,” declares Bob Knakal, chairman, New York investment sales. “More properties were sold in the city than ever before, with 5,197 properties trading hands. The dollar volume surged 45% to $55.8 billion. These tremendous increases in volume were accompanied by value appreciation of 20% citywide, with Manhattan leading the way with a 34% gain, resulting in an average price per square foot of over $1,400. I

The number of properties sold surpassed the previous high of 5,018, which was reached in 2007. Citywide dollar volume was $55.8 billion, second only to 2007's $62.2 billion, when the Equity Office portfolio sold for $7 billion.

“All markets performed exceptionally well,” notes Adrian Mercado, VP, research. “The outer markets experienced record levels of sales activity in 2014, with Brooklyn, Queens, Northern Manhattan and the Bronx exceeding $15 billion, which is $5 billion more than the previous peak of 2007.”

Those results make him bullish on the investment sales market this year. “We expect this record level of dollar volume to continue, and possibly be exceeded, in 2015.”

While Manhattan led the way with $41 billion of activity in 2014, the spoils went to other boroughs—and surprising parts of Manhattan—as well. Brooklyn's volume exceeded the 2013 total by 67%, with $6.4 billion sold. Northern Manhattan reached an all-time best in transactional turnover (measured as the percentage of properties sold over total inventory) as 6.6% of the total stock changed hands last year.

Retail continues to drive pricing, Cushman notes, while scarcity of land and strong demand continued to exert upward pressure on pricing citywide, with price per buildable square foot up 33% from 2013. Manhattan finished out the year at $579 per buildable square foot.

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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.

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