NEW YORK CITY—Manhattan office sales point to Q3 2017 as the weakest quarter compared with the past five years, failing below $1 billion for the first time. According to Yardi Matrix data analyzed by Commercial Café, total sales volume fell 67% year-over-year and 74% from the past quarter, even though the number of closed transactions remained consistent from the Q2.

Commercial Café also reports only six noteworthy office deals closed in Manhattan in Q3, totaling just $991 million with 3.1 million square feet of office space. In Q2, $3.8 billion in office sales transactions covered 5.9 million square feet.

The average price per square foot for the Manhattan office market decreased 19% year-over-year and 21% compared to Q2. Falling below $1,000, prices fell to $821 at the close of the third quarter. However, the website reports that this average price was roughly equivalent to the average of the past five years.

The $465-million sale of the 19-story building at 375 Hudson Street was the largest office transaction of Q3. Trinity Real Estate acquired a 51% interest in the high rise. The Norwegian firm, Norges Bank Real Estate Management, reported it acquired a $223-million, 48% interest in the building, and Hines acquired a 1% interest. Tishman Speyer was the seller. Both an office and retail building, 375 Hudson Street includes 17 floors of office space, and ground floor retail, totaling a rentable area of 1.1 million square feet. Real Estate Weekly reported at the time of the sale, the building was 100% occupied, with Saatchi & Saatchi leasing 62% of the space.

Commercial Café also notes with six new projects totaling 3 million square feet expected to enter the market, Q4 should yield higher sales volume figures. Major projects include One Soho Square, encompassing 768,000 square feet in 13- and 15-story buildings, having office and retail space, and a more than 26,000 square-foot showroom. The website reports space has already been leased to MAC Cosmetics, Glossier, Trader Joe's and Cineflix Enterprises. Plus, the 32-story Verizon Building at 375 Pearl is undergoing a repositioning, with its limestone façade to be replaced by glass curtain walls.

Instant Insights /

Q3 Manhattan Office Market Sales Show Sharp Downward Trend

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