Perusing statistics on the city’s biggest commercial property deals is like going to the Empire State Building’s observation deck with tourist friends from out of town: You know it’s supposed to mean something, but New York can be so much cooler.
The statistics underline just how far New York’s property sales market has fallen, and not just since Lehman Brothers’ September 2008 collapse. The biggest deal in the first quarter of 2009 was CB Richard Ellis Investors’ $355 million buy of 1540 Broadway’s office condos. The biggest of the same quarter last year was Altria’s sale of its 120 Park headquarters to Eyal Ofer’s Global Holdings for $525 million.
Neither are anything close to the gargantuan billion-dollar deals of the boom. When will those return, if ever?
“There’s so much capital on the sidelines!” That’s the de facto mantra now among the city’s commercial sales brokers, with the idea being that more deals like 1540 Broadway will encourage further capital investment.
But that deal’s now over two months in the market’s rearview mirror, and another one of similar scope has yet to appear. It’s fear; it’s here; get used to it.
After 1540 Broadway, the biggest commercial deal of ’09 so far was Sotheby’s auction house buying back from Aby Rosen’s RFR Holding its old headquarters at 501 East 71st Street for $135 million, plus assumption of the mortgage.
After that, the drop-off becomes steeper and more illustrative of New York in the Great Recession: the 122 East 58th Street sale for $28.5 million; 482 Seventh Avenue for $20.3 million; a vacant lot at 122 East 32nd Street for $15.8 million.
In the first quarter of 2008, the top 10 New York commercial property trades amounted to $1.639 billion. In the first quarter of 2009, the top 10 came to less than half that amount—a sizable chunk, by any individual market’s standards. But by New York’s? Not cool at all.
Statistics from PropertyShark, www.propertyshark.com