The Return of the Megadeal Makes Prices Boom
The average Manhattan property price has hit a post-recession high of $40.5M, according to Massey Knakal’s Hall Oster, whom we snapped this morning at his company’s 275 Madison office. That’s thanks to megadeals like David Werner et. al.’s $1.5B 5 Times Square, the biggest deal trade since Google bought 111 Eighth and Related and partners’ $1.3B acquisition of the Time Warner Center office space. What’s keeping total dollar volume below ’06/’07 levels is the absence of mega-portfolio trades like Stuy Town and the Equity Office portfolio.
There may be some pushback to soaring prices, says MK chairman Bob Knakal, but they’re sill plenty high, at $1,303/SF. And several large transactions announced in Q3 and likely to close by the end of the year peg 2014 at a $55B to $60B year for the city. Bob likens 2012 to ’14 to 1986 to ’88 when tax law changes boosted activity in the first year, creating an artificial dip in the second, and returning to the cycle’s natural peak in the third year.