New York Brokers' Confidence Is Dropping
Brokers are spooked by the leasing markets in both the commercial and residential sectors, making them less confident than they were at the end of last year.
Overall, the Real Estate Board of New York’s Real Estate Broker Confidence Index was 5.78 out of 10 in the first quarter of 2018, the lobby group said Monday, a decrease of 1.21 from the last quarter of 2017.
“Residential and commercial broker confidence was decidedly more upbeat in the fourth quarter of 2017, but market confidence in the first quarter of 2018 remained positive overall,” REBNY President John Banks said in a statement.
While some commercial brokers said the tax reforms will have a positive impact, others are concerned about the current leasing environment. Office landlords are offering significant concessions to fill their space, and certain parts of the city are grappling with large blocks of space becoming available.
The retail leasing environment is also facing challenges. Retail rents fell 20% in the first quarter, according to CBRE research, and landlords are increasingly allowing smaller, less-established tenants to take space in their properties in order to avoid vacancies.
The Commercial Broker index was a 6.02, a drop from 1.29 the quarter before. When compared to this time last year, however, the index has jumped by 0.74. Meanwhile, residential brokers are worried about residential sales financing and the high rate of concessions that landlords are relying on to fill apartments.
The residential broker index dropped by 1.03 to hit 5.54 in the first three months of the year.