By the year-end, there is an estimated total of $70 billion worth of property sales taking place in New York's commercial real estate market, and it is shaping to be an all-time, historic year, Daniel Geiger of Crain's reports.
This is a forecast made based on the estimates by Cushman & Wakefield and CBRE, pointing to sales of office buildings, hotels, multi-family properties, as well as other commercial real estate as the reason for the increase in dollar volume.
"Without a doubt we'll eclipse the all time record dollar volume for the market," said Robert Knakal, Cushman's chairman of investment sales. "It's just a question of by how much."
There is a long list of big property sales underway including that of French insurance company AXA reaching a deal to sell two midtown office towers, 1285 Sixth Avenue, and 787 Seventh Avenue, amounting to more than $3.5 billion. Among other notable sales were the acquisitions of RXR Realty of 230 Park Avenue for more than $1 billion, SL Green Realty Corp's purchase of 11 Madison Avenue for $2.6 billion, and the $1.6 billion purchase of Norwegian bank Norgis of a stake in Trinity Church's downtown office portfolio.
It was also in this year that Anbang, a China-based insurance company, bought the Waldorf Astoria for $2 billion - and is considered the most expensive hotel deal ever.
According to Cushman, there are about 9 billion dollar deals that are expected to close before the end of the year, a far greater number and is almost the double of the 5 that took place in the previous year. In 2013, there were only 4 billion deals that took place and zero for years 2009, 2011, and 2012, and 1 for 2010 which was Google's acquisition of its headquarters building in the city at 111 8th avenue.
Knakal however sees a weaker real estate activity when 2016 comes in. This deceleration has already started as 2015 progressed, with the 6% drop of citywide sales from last year.
Landlords are selling now that the city's commercial real estate market is on a roll with high prices and low interest rates. While there was a decrease in transactions leading to lower sales tally, the drop in volume was compensated by the number of billion dollar deals, Knakal added.
