NEW YORK CITY-Despite numerous pledges made and press conferences held in the wake of Hurricane Sandy, a surprisingly high number of commercial property executives don’t expect to see significant change in Lower Manhattan when it comes to storm vulnerability. So says a new study from industry research firm Marks Paneth which, counterintuitively, also reports that a majority of industry participants expect the value of commercial property to rise.
In the most recent Marks Paneth Gotham Commercial Real Estate Monitor survey of over 100 top commercial real estate professionals across the city, half of executives say they’re “not confident” that there will be significant government effort to prevent future flooding. Yet, the majority—51%—believe commercial property in Lower Manhattan will get pricier this year and only 6% believe property values in Lower Manhattan will drop this year. Just seven months ago, in June 2013, nearly a third of executives (32%) thought values would decline.
“Since Hurricane Sandy, Lower Manhattan commercial property had been a source of concern—or potential opportunity, depending on your perspective—for the city’s commercial property leaders,” says William Jennings, partner-in-charge of the real estate group at Marks Paneth. “Now, it seems, they’re getting bullish on values.”
“On the other hand, the commercial property industry seems to be somewhat skeptical about whether government will deliver on projects to minimize the potential for future flooding at the southern end of Manhattan,” he adds.
Survey respondents’ optimism on Lower Manhattan values likely is due to stellar performance reports that include very positive forecasts.
Professionals who participate in the research include owners and managers of commercial property, commercial real estate brokers and agents, and attorneys and accountants specializing in the sector.