Over the last few years, countless buyers have approached me looking to pre-empt a bid process. “What number will the seller take the property off the market?” I am often asked. I advise clients against the dangers of pre-empting, as they may end up leaving money on the table.

We typically like to be in the market between four to six weeks to make sure that we have fully exposed a property to buyers and brokers around the world. Once a dozen or more offers are in place, a seller can be properly educated on pricing and call for final bids, ensuring they receive maximum price. And yet, many times, sellers do accept pre-emptive bids. I remember selling a Hudson Yards development site for $238 million dollars where the buyer said his investors would not compete in a bid process. They contracted on the property within the first few weeks of our going to market.

In a rising market, buyers like to pre-empt as they want to avoid participating in a bidding war. They are hoping to get the best pricing and the highest likelihood to secure the asset. But in today's market, they might end up overpaying and it might be best to wait. Some of the best opportunities I'm seeing today are listings which have been on the market for quite some time. Most sellers who have kept their properties on the market understand current market fundamentals and will adjust pricing accordingly; those who do not will likely take their properties off the market. Buyers should be watching for the motivated sellers who have reduced asking prices and then look to strike.

For example, we are currently marketing a Midtown South office building on East 33^rd Street between Fifth and Madison Avenue. When we started the marketing process, we went out without an asking price and were given guidance over $60 million dollars. The seller, who remains motivated to sell, has now established an asking price of $58.5 million.

Even with reduced pricing, many buyers are still waiting on the sidelines hoping that prices will continue to move in their favor. This is demonstrated by the fact that 2016 New York City sales volume has declined. This year, we are on pace for a total of $63.1B in sales, the second highest ever, but a 28% decline from 2015. Meanwhile, the number of sales dropped by 13% to an annualized 4,514 sales.

Real estate investors are not the only ones sitting on the sidelines. As reported on CNBC, the world's billionaires are holding more than $1.7 trillion in cash or 22.2% – the highest amount Wealth-X has ever tracked. This is due to the perceived growing risk in the economy and the world, but also a byproduct on recent liquidity events from acquisitions and mergers. If New York City is considered a safe haven for investments, we may actually benefit from this if more investors turn to hard assets.

When looking at statistics, it is important to remember that recorded sales are typically negotiated three to six months beforehand when the contracts were signed. Based on what has felt like a slower summer for contract executions due to upcoming presidential elections and overall global uncertainty, it would not surprise me if we saw eve to a further reduction in sales when the second half of this year is recorded.

Despite this slow down, the New York City Investment Sales market managed to post gains in the First Half of 2016, rising to an all-time high of $560 per square foot, a 15% increase over 2015. These records were even more pronounced in Manhattan where sales rose to $1,630 per square foot, a 23% increase, which is equivalent to a low cap rate of 3.73%, buoyed by a few $17,000 per square foot retail sales. Without them, the gain would have been around a more modest 4% increase in Manhattan or 7% citywide.

Although pricing achieved peak levels, the development market has suffered large declines in activity with dollar volume cut in half since 2015, while the number of sales values have fallen 12%. Manhattan surprisingly posted a 9% increase in price to $694/BSF likely because those owners who sold achieved their pricing whereas others who did not, held onto the property.

Finally retail appears to be choppy at best. Asking rents only improved in three out of the ten main submarkets tracked, Meatpacking, SoHo, and Lower Manhattan. However, availabilities in Meatpacking and SoHo respectively, hit concerning levels of 22% and 25%. Herald Square and Fifth Avenue, between 42^nd and 49^th, also had availability at 22% and 27%, respectively.

Overall, there are many mixed signals in the market. Strong office leasing and prices for investment sales are reasons for hope, but the development market and most retail locations tell a different tale. Finally, there are outside factors that could come into play, such as the impact of Brexit and the upcoming presidential and mayoral elections. Buyers should use this uncertainty to their advantage and transact with motivated sellers while they can still lock in great long term debt.