NEW YORK CITY—Most real estate executives believe commercial real estate property values here have reached their peak. However, that is not to say executives aren't bullish on Manhattan real estate. In fact, they believe New York City is mostly insulated from the negative effects of today's global crises.
According to the latest Gotham Commercial Real Estate Monitor authored by accounting firm Marks Paneth, 71% of New York City property professionals believe real estate values have hit their high water mark, which is considerably higher than the 54% who said values had reached their peak in a previous Marks Paneth survey released in May.
In the survey released today, a total of 35% of executives say values will begin declining, while 36% contend they will hold their value and 21% believe they will increase in the short term.
"While executives see New York real estate values topping out in a pretty definitive way, they're hardly concerned that today's international crises will slam the market," says William H. Jennings, partner-in-charge of the real estate group at Marks Paneth. "There is a touch of concern, though, about China."
In its Gotham Commercial Real Estate Monitor released this past summer, executives were concerned over possible interest rate hikes and the slowing economy in China.
In its latest survey, 46% are concerned that an interest rate hike would put more downward pressure on values. A total of 35% of the 100 executives polled last month say values will be unaffected.
A majority of professionals—55%—say volatility in China will have a negative impact on the city's commercial property market, virtually unchanged from the 57% who had a similar view back in the spring.
Just 11% believe crises abroad will hurt the New York property market. In fact, 41% say they could boost values here since money flows out of distressed foreign economies to safe havens such as New York. A total of 38% note that global crises are a double-edged sword that can both raise and drag down values.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
