NEW YORK CITY-Recently commercial real estate investors have broken what had been the $1-billion ceiling for trophy high-rise office buildings, despite the fact that office rents in Manhattan remain sluggish.
From the fall of 2008 until the end of 2012 there was just one sales deal for a U.S. office building that topped $1 billion. Thus far in 2013, three deals in Manhattan have surpassed the $1-billion mark, according to the Wall Street Journal. All three deals surpassed past record values for price per square foot set during the boom years, according to Real Capital Analytics LLC.
"This market was facing a bit of a glass ceiling on the $1-billion transaction," says Darcy Stacom, of CBRE Group Inc. "We now have a new opening in the marketplace."
The commercial office sales market is being powered by low interest rates, despite Manhattan office rents for Manhattan's top-quality buildings still being approximately 20% below peak levels, according to Jones Lang LaSalle Inc. See story in the Wall Street Journal.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
