Robert Knakal, chairman of investment sales brokerage Massey Knakal, spells out in a recent interview how rising oil prices are affecting building sales in New York City:
Right now we are seeing, for the fi rst time since drilling began in the 1850’s, prices climbing for 7 consecutive years. When we are underwriting apartment buildings now, we can no longer rely on last year’s fuel bills to forecast next year fuel expense. We are underwriting using today’s price to account for the significant increases we have seen. Not too long ago fuel was $750 per unit and today it can be as much as $2,000 per unit.