Content area
Full Text
AFTER NEAR PARALYsis for months following the Sept. 11 attack on the World Trade Center, the market for Manhattan skyscrapers is making a dramatic return to life.
A pair of high-profile deals has sparked a revival of the city's office building sales. Trophy properties 450 Park Ave. and 745 Fifth Ave. are changing hands for record prices of around $500 per square foot, a pricing threshold that calls to mind the bygone days of freespending Japanese investors.
Leasing remains extremely sluggish. But office property sales, a vital segment of the commercial real estate market, are being driven by a flood of capital as investors seek safe haven in Manhattan bricks and mortar. Investor enthusiasm is increasingly convincing reluctant sellers to get back in the game.
"People have returned to the old reality: Hard assets are a great thing," says Darcy Stacom, an executive vice president at brokerage Cushman &Wakefield Inc.
Surge of activity
Manhattan sale deals struck so far this year total $3.3 billion, according to brokerage CB Richard Ellis Inc. The sudden surge of activity is expected to continue, with prices holding firm.
Sales volume is not expected to return to the high levels of the past two years, though. As long as interest rates stay low, some owners will refinance rather than sell, cutting down on the supply of properties in the pipeline. "We are capital-long and product- short," says Scott Latham, a CB Richard Ellis senior vice president.
Even so, there's been a remarkable change in the sales market, which almost ground to a halt after Sept. 11.