NEW YORK CITY—The majority of New York real estate executives say commercial property commercial values in the city are reaching the top of the roller coaster, according to a survey fielded by accounting firm Marks Paneth.
More than half (54%) of executives say commercial property values have ended their climb, and nearly a quarter—22%—say commercial property values in Manhattan will begin declining. Most property executives surveyed—61%—say now is a good time for owners of Manhattan real estate looking to maximize profits to sell or some of their holdings in the borough. But 56% advise holding commercial property in Queens because it could keep going up in value, and 55% say the same about the Bronx.
That's according to the Spring 2015 Gotham Commercial Real Estate Monitor, a survey completed of more than 100 New York commercial property owners, brokers, agents, engineers, accountants and lawyers specializing in the commercial space.
Manhattan commercial real estate was described as "highly overvalued by just 26% of executives but nearly half—48%—say it is "moderately overvalued." By contrast, in January 2013, only 8% of executives said Manhattan commercial property was “highly overvalued.”
"Since 2013, a lot of property executives have said commercial real estate in New York is overvalued compared with property in other major cities,” says William Jennings, partner-in-charge of the real estate group at Marks Paneth. “But now the view has reached something of a tipping point: Most don't see values going any higher, at least in the current, long cycle. It will be interesting to see if this is the case—and whether owners start trying to cash out.”
A big majority—69%—of real estate executives foresee New York commercial property owners diversifying into multifamily and condominium developments. However, nearly half—44%
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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.
