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In the world of commercial real estate, maintaining good relationships is everything. And teaming up with a partner can allow owners to keep control of their assets instead of surrendering to lenders through default and foreclosure. Given the increased competition for core assets and upticks in property pricing in today’s marketplace, landlords, owners and managers are exploring the structures and terms of partial-interest deals and JV partnerships as a result of the economic downturn.
“We are seeing it everywhere,” Scott Landis, head of the Landis Group, tells REAL ESTATE FORUM. “Investors and owners, when they’re able to, want to diversify risk, and bring in a partner or two. It certainly makes things a little less risky for one group to take it on their own, but also it gives people the opportunity to create partnerships and a platform to do other ventures together, which we’ve seen numerous times over.”
The trend has quickly become a dominant force across the city’s office market. According to data provided by Real Capital Analytics, partial-interest deals comprised about $10 billion of the $15.7 billion in Manhattan office deals last year, a significant increase from the $5.9 billion of such transactions completed in 2007, when the sector generated about $42 billion of sales volume in Manhattan alone.
The low supply of available properties and high demand from international buyers is also driving up competition for prime assets citywide. In the first half of 2012, both dollar volume and property sales numbers were up in Manhattan and the outer boroughs. According to midyear data from Massey Knakal Realty Services, New York City saw $14.4 billion in sales in the first half, a 14% increase from Q1 2011, putting the market on track for a projected $30 billion to $32 billion in sales by year’s end…
…To read the rest of the story, please visit the October 2012 issue of Real Estate Forum.
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