WifiScreen FREE Windows Application to allow using iPad/Tablet as the second monitor.
Wall Street Journal / Biz - Money

New York Falls Behind Dallas and Los Angeles in Commercial Property Sales

New York is having such a slow year in commercial property sales that it has fallen behind Los Angeles and Dallas in deal volume, according to a new report by Real Capital Analytics Inc.

By

Peter Grant

New York is having such a slow year in commercial property sales that it has fallen behind Los Angeles and Dallas in deal volume, according to a new report by Real Capital Analytics Inc.

Investors purchased only $14.1 billion worth of commercial property in the first three quarters of this year in Manhattan, a decline of 56% from the same period last year. In Dallas the volume was $15.1 billion, an increase of 11%, while Los Angeles’ volume was $21.2 billion, up 6%, Real Capital said.

The trend is unusual because Manhattan “is the perennial top market in these rankings,” Real Capital said.

Real Capital said New York volume was being crimped partly because of the high number of deals—priced at a total of $5.1 billion—that are under contract but haven’t closed. “There is a chance of Manhattan pulling ahead of Dallas by year-end,” the report says.

In Dallas, the activity is being driven partly by sales of rental apartment buildings, Real Capital said. In Los Angeles, “megadeals” accounted for 33% of all activity this year compared with 20% last year, the firm said.

Commercial property sales nationwide were $114.2 billion in the first nine months of 2017, down 9% from the same period last year. The drop in the third quarter of this year marked the fourth consecutive quarter of declining year-over-year activity, the firm said.

READ MORE

  • Commercial Property Transactions Dry Up as Sellers Hold Out for Better Prices
  • Lord & Taylor Sells NYC Flagship Store for $850M
  • Shortage of Industrial Space on Long Island Squeezes Tenants

Real-estate industry participants in New York say the deal slowdown is partly the result of the high levels that values have reached after a lengthy bull market. Buyers are becoming reluctant to pay high prices because they are concerned this cycle is getting stale and rents don’t seem to be rising much.

Meanwhile most sellers are resisting price cuts.

“A lot of sellers don’t have to come off their numbers,” said Dennis Russo, chairman of the real estate group at law firm BakerHostetler. “So they’re refinancing.”

Industry executives say neither side is showing signs of blinking.

“It may stay stagnant for a little bit of time until something cracks,” Mr. Russo said.

Write to Peter Grant at peter.grant@wsj.com

Original Source

ADS

LATER