In the first quarter of 2017, Manhattan commercial real estate sales transactions were down about 50% compared to the same time in 2016. The market has been anticipating this slow down for some time, however, it comes as a big surprise that the numbers would be so drastic.
Recapitalization transactions and equity investments took center stage as 60 Wall Street and 1 Vanderbilt found new partners. Both transactions were foreign Asian capital sources, namely GIC from Singapore and National Pension Service of Korea respectively.
Not only was the total volume of sales transactions down, the number of deals were down 26%, and the average price per deals were down 32%. All indications point to a lackluster quarter, and a slow start to commercial real estate sales throughout the city.
Okada & Company founder Christopher N. Okada believes "...it's a perfect storm of the city's lack of incentivizing development through 421-A programs [which may have just been revived], the financial institutions lending restrictions from laws like Dodd-Frank, a rise in interest rates, a gap between what sellers are expecting and what purchasers are willing to take, and simply put a cooling of a red hot recovery... we knew it was coming. I guess the big question is; what's the next right move?"