Where Have All the Big Building Sales Gone?

Oh, to be back in spring.

The Times building, the Clocktower on Madison Avenue and the Lipstick Building, all trophies, went to contract within mere weeks of each other earlier this year. It was a time when you’d wake up one morning and 230 Park Avenue would sell for more than $1 billion, wake up the next and there goes 60 Wall for more than a billion, and hey! there’s 280 Park Avenue selling off market for more than $1 billion.

It seemed like the new reality in Manhattan real estate.

Then the summer hit with those crazy credit markets.

Since May, there hasn’t been another trophy sale or a $1 billion building sale. After a furious run, the market is taking a pretty big breather.

“There was a huge amount of activity and you get these blips and they can’t be sustained over time,” said Jon Caplan, the broker at Cushman & Wakefield. “It’s just the serendipity of the market. But we’re still in a very strong transactional market, there’s still a lot of capital and the fundamentals have only gotten stronger.”

But: “Are we at the same place that we were in the second quarter of this year? Probably not.”

Indeed, over the past few months things have settled down. In May, $6 billion worth of properties was in contract or sold; in June, that fell to $4.7 billion; in July, to $2.3 billion, according to the research firm Real Capital Analytics. In August, that should only fall again.

But does this have to do with all the tremors from the credit markets? Or is it because everyone in real estate has ditched the city for Further and Gin lanes?

It’s unclear, say analysts and brokers.

“Anecdotally, we all know that the volatility on the debt side is impacting some transactions,” said Dan Fasulo, a director at Real Capital Analytics. “That being said, it’s too early to have any evidence to support that.”

If anything, Mr. Fasulo argues, there’s still so much capital to go around, the lull we’ve seen over the past few months is only temporary.

“At the end of the day this volatility on the debt side is really just a hiccup,” he said. “Once everyone gets comfortable with the new level of debt pricing, then you’ll see investors begin to ramp up again and buy with a fury.”

Check in after Labor Day!

Where Have All the Big Building Sales Gone?