New York City Commercial Real Estate Sales Slump in First Half of 2017

By Keiko MorrisFeaturesDow Jones Newswires

New York commercial real estate deals are drying up in the first half of 2017.

The value of transactions in New York City decreased 39% in the first 6 months of the year from the same period a year earlier, declining significantly in every borough except Staten Island, a new report said.

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Sales totaled roughly $18 billion in the first half of the year, down from $29.5 billion in the year-prior period, according to a report from the Real Estate Board of New York, an industry group.

The number of deals were down by 6%. The total amount of sales fell in every property-type category, from office buildings to hotels.

"There is a slowdown in activity, certainly in terms of high-priced sales," said Michael Slattery, a senior vice president at the Real Estate Board of New York.

The dip in dollar volume and number of transactions suggests investor uncertainty and a pullback in capital, Mr. Slattery said. Concern for rising interest rates might also play a role in the slowdown, he added. Since the organization began tracking commercial property sales in 2014, transactions hit a peak of $37 billion in the first half of 2015, the report said.

"If we had a longer trend line, we would be able to make more sense of what we're seeing," Mr. Slattery said.

Despite the $2.2 billion sale of the office tower at 245 Park Ave., office deals declined 40% to $7.3 billion in the first half of the year. Multifamily rental buildings with elevators, usually a stable category, decreased 51% to $1.9 billion.

Garages, gas stations and vacant land was the one property category where both total sales amount and the number of transactions didn't decline in unison. While total sales fell 46% to $919 million, the number of deals in this category rose 25% to 506, suggesting the group of properties sold this year were less valuable than the group sold last year.

"The transactions going up shows the universe of sites investors are looking at has expanded," said Max Haight, a research analyst at the Real Estate Board of New York.

Staten Island bucked the trend in the first half, climbing 61% to $300 million in commercial sales. Transactions rose to 190 in the same period, a 23% increase from the previous year. Although no multifamily rental buildings were sold on Staten Island in the first half, sales of garages, gas stations and vacant land and industrial and retail properties accounted for 89% of the total dollar amount sold.

The $67 million sale of a 2.1 million square-foot vacant site south of the Goethals Bridge off-ramp was the highest priced deal in the borough in the first half, the report said.

Write to Keiko Morris at

(END) Dow Jones Newswires

August 14, 2017 18:52 ET (22:52 GMT)